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Trump has suggested he expects to forge another trade agreement with Chinese President Xi Jinping when they meet on the sidelines of a Pacific Rim summit in South Korea later this week. That could alleviate trade tensions that have roiled world markets and disrupted business since Trump's return to the White House.

Japan's benchmark Nikkei 225 lost 0.2% in early trading to 50,419.96, falling back after hitting record highs since .

On Tuesday, Trump is , visiting a U.S. military base and then meeting with business leaders in Tokyo. Both sides are reaffirming their security alliance and Japan is promising to abide by Trump's demands for more investments, and bigger role in its own defense and increased imports from the U.S.

“So Asia opens not with fireworks, but with an uneasy calm — a market breath half held. Traders aren’t chasing the rumor this time; they’re watching, weighing, waiting for something real to sign,� said Stephen Innes, managing partner at SPI Asset Management.

Australia's S&P/ASX 200 fell 0.4% to 9,017.80. South Korea's Kospi shed 1.2% to 3,992.77 after the nation reported relatively strong quarterly economic growth thanks to strong consumption, investments and exports.

On Wall Street, stocks climbed to on Monday ahead of a week packed with potentially market-moving events. The S&P 500 rose 1.2% to 6,875.16. The Dow Jones Industrial Average added 0.7% to 47,544.59, and the Nasdaq composite jumped 1.9% to 23,637.46.

The U.S. stock market has been on a record-breaking rally. The S&P 500 has shot up a stunning 38% since hitting a low in April, when worries about on China and other countries were at their peak. Besides hopes for easing trade tensions, the rally has also been built on to happen.

One is that the Federal Reserve will in order to give the market a boost. The Fed’s next announcement on interest rates is due on Wednesday, and the nearly unanimous expectation among traders is that it will cut the federal funds rate by a quarter of a percentage point at a second straight meeting.

It’s not a certainty though, because the Fed has also warned it may have to change course if inflation accelerates beyond its still-high level. That’s because low interest rates can make inflation worse.

Besides lower interest rates, another expectation that’s propped up stock prices is the forecast that U.S. companies will continue to deliver solid growth in profits. Some of Wall Street’s most influential stocks are set to report their results this week, including Alphabet, Meta Platforms and Microsoft on Wednesday, and Amazon and Apple on Thursday.

In the bond market, the yield on the 10-year Treasury eased to 3.99% from 4.02% late Friday.

In energy trading, benchmark U.S. crude slipped 3 cents to $61.28 a barrel. Brent crude fell 2 cents to $64.86 a barrel.

In currency trading, the U.S. dollar dropped to 152.41 Japanese yen from 152.88 yen. The euro cost $1.1658, up from $1.1645.

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AP Business Writer Stan Choe contributed.