Asian stocks swung through the morning session Tuesday as traders weighed the outlook for US interest rates ahead of the release of a key inflation reading. Investors are also gearing up for the corporate earnings season, with some observers warning that profit expectations, which have helped push several markets to record highs, may have gone too far and disappointing reports could spark a pullback in equities. While last week’s Federal Reserve guidance pointed to three cuts before the end of the year, strong economic data and comments from some central bank officials have fuelled worries it could come up short. The projections sparked a rally on markets and calmed traders spooked by the previous week’s data showing consumer and wholesale prices rose more than estimated in February. However, with the US economy still showing few signs of trouble and the labour market still strong investors are reticent, with the closely watched personal consumption expenditures (PCE) — the Fed’s preferred gauge — the main focus. Readings on economic growth, jobless claims and business sentiment are also up for release. “After a strong performance last week, investors may be taking a hiatus and possibly enjoying the spring break, while others are adopting a wait-and-see approach for the next bullish catalyst, such as a favourable outcome from the Fed’s preferred inflation gauge,” said SPI Asset Management’s Stephen Innes. “In this context, an ‘all-clear’ signal would entail the inflation data meeting consensus expectations or coming in lower than anticipated.” Mixed signals from Fed officials in recent days have done little to remove any uncertainty. Atlanta president Raphael Bostic on Monday reiterated his comments Friday that he saw only one cut this year, adding that acting too quickly could be disruptive, while governor Lisa Cook said decision-makers should be cautious. However, the Fed’s Chicago chief Austan Goolsbee stuck to the three-cut line. All three main indexes ended down on Wall Street as talk swirls that the recent rally may have been overdone. Asia fluctuated, with Hong Kong, Singapore, Seoul and Taipei all rising but Tokyo, Shanghai, Sydney, Wellington, Manila and Jakarta in the red. The yen was holding above 151 per dollar, with any further weakness offset by a warning from Japanese officials that they were ready to step in to support the currency if it retreats too much. And oil prices held Monday’s gains that came on the back of fresh geopolitical worries and following the latest attack on a Russian crude refinery that sparked supply concerns, while Israel’s planned assault on Rafah in Gaza was also causing some unease.