Asian stock markets struggled to maintain their recent highs on Tuesday despite a larger-than-anticipated interest rate cut in China, which failed to ignite much excitement among investors hoping for more substantial stimulus measures.

China’s decision to lower its five-year loan prime rate by 25 basis points to 3.95% exceeded economists’ expectations of a 5 to 15 basis point cut. However, this move didn’t prevent the Shanghai Composite from sliding 0.7% and blue-chip stocks dropping 0.6% in early trading.

According to Christopher Wong, a foreign exchange strategist at OCBC, while the rate cut is significant and demonstrates policymakers’ commitment, its effectiveness in sustaining momentum remains uncertain. Investors eagerly await additional fiscal support measures, particularly those targeting consumer spending.

Meanwhile, the yuan remained stable against the dollar, while Japan’s Nikkei index opened flat, still shy of surpassing its 1989 record high. MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.1%, retreating from its January peak on Monday, with South Korean shares experiencing a 1% decline.

There was a slight downturn in global markets outside China as traders adjusted their expectations for U.S. interest rate cuts following higher-than-expected readings on producer and consumer prices. Though sparse this week, economic indicators are expected to influence market direction.

Bob Savage, head of markets strategy and insights at BNY Mellon, noted that market sentiment has shifted from anticipating six Federal Reserve rate cuts in January to pricing in only three, emphasizing upcoming data releases, particularly those related to consumer credit, sentiment, and employment.

U.S. Treasury yields increased, with ten-year yields rising 1.4 basis points to 4.31%, while two-year yields remained steady at 4.65%. Currency markets saw modest movements, with the dollar firming against the Japanese yen and the New Zealand dollar pausing its recent climb.

In Australia, ANZ Bank shares declined by 3.5%, while Suncorp shares surged nearly 6% after ANZ’s acquisition of Suncorp’s banking business received approval from the competition tribunal. However, shares of casino operator Star Entertainment plummeted over 20% to a record low following the announcement of a second regulatory investigation into its Sydney casino operations. BHP, the world’s largest listed miner, reported flat half-year profits, causing its shares to slip 0.2%.

Looking ahead, investors are closely monitoring Nvidia’s earnings report on Wednesday to gauge whether it can surpass already high expectations. In commodity markets, Brent crude futures dipped 0.1% to $83.45 per barrel, while gold held steady at $2,018 an ounce. Soft commodities, however, opened the week on a weaker note, with corn futures hitting a three-year low due to increased U.S. inventories and wheat reaching a 2-1/2-month low.