South African stocks could get off to a cautious start on Tuesday after US markets edged lower overnight and Asian equities followed suit in morning trade.

Appetite for equities and other risk assets has been dented by a better-than-expected jobs reading from the US last week that tempered expectations for aggressive interest rate cuts by the Federal Reserve.

“The fate of stocks will be closely linked to rates pricing, with stocks having rallied strongly on aggressive Fed rate cut expectations,” Tapas Strickland, director of economics and markets at National Australia Bank, said in a note on Tuesday.

Traders would also closely watch corporate earnings in the US, with earnings season due to kick off next week, Strickland said.

The market expects flat earnings growth for the second quarter amid damaging trade tensions between the US, China and other major economies.

“The latest news overnight suggests there may be some headwinds — Apple’s iPhone sales fell sharply in India,” Strickland said.

Trade tensions appear to be spreading, with Japan placing restrictions on exports of materials to South Korea that are used in the production of smartphones and memory chips.

Hong Kong’s Hang Seng Index was 0.8% down on Tuesday, as the Chinese special administrative region’s leader, Carrie Lam, said the controversial extradition bill “is dead” following large-scale protests in the city.

The Shanghai Composite was 0.5% lower, Korea’s Kospi fell 0.1%, and Australia’s main benchmark 0.2%. Japan’s Nikkei 225 was flat.

Chinese internet and gaming company Tencent was 0.7% lower in Hong Kong, suggesting another weak start for major shareholder and JSE-heavyweight Naspers.

But JSE-listed BHP Group was 1.1% up in Australia.

No major company results or data releases are expected locally on Tuesday. Elsewhere, the US is due to publish job openings and labour turnover data for May.

The rand, which has weakened since US non-farm payroll data beat expectations, was slightly weaker on Tuesday morning at R14.20/$, R17.77/£ and R15.93/€.