TOKYO (AP) — Asian shares were mostly lower Tuesday amid concerns about regional stability as an expected visit by U.S. House Speaker Nancy Pelosi to Taiwan prompted threats from Beijing.

Benchmarks headed downward across the board in the region in early trading, including Japan, China, South Korea and Australia.

China sees Taiwan as its own territory and has repeatedly warned of “serious consequences” if the reported trip to the island democracy goes ahead. Pelosi has said she is visiting Singapore, Malaysia, South Korea and Japan for talks on a variety of topics, including trade, COVID-19, climate change and security.

While there have been no official announcements, local media in Taiwan reported Pelosi will arrive Tuesday night, making her the highest-ranking elected U.S. official to visit in more than 25 years.

“Risk sentiment took a hit following reports suggesting U.S. House Speaker Pelosi is to go ahead with her visit to Taiwan. Investors are likely to be looking for defensive positions as the geopolitical situation could escalate over the next few days,” said Anderson Alves of ActivTrades.

Japan’s benchmark Nikkei 225 declined 1.6% in morning trading to 27,546.58. Australia’s S&P/ASX 200 dipped 0.5% to 6,956.00. South Korea’s Kospi slipped 0.7% to 2,435.58. Hong Kong’s Hang Seng dropped 2.9% to 19,582.17, while the Shanghai Composite dove 2.4% to 3,183.44.

“The first big relief point will be Pelosi’s safe arrival in Taiwan, followed by her safe departure. No party wants a real war, but the risk of mishap or even aggressive war game escalation is real, which could always lead to a tactical mistake,” Stephen Innes, managing partner at SPI Asset Management said.

Surging COVID-19 infections in some regions, including Japan, remain a major concern. Lockdowns and restrictions on economic activity have caused serious damage to regional economies, disrupting supply chains for major manufacturers, squelching tourism and shuttering restaurants.

On Wall Street, stocks gave up early gains and closed slightly lower as investors began another busy week of company earnings and economic reports.

The S&P 500 gave up an early gain to end down 0.3% at 4,118.63. The Dow Jones Industrial Average dipped 0.1% to 32,798.40 and the Nasdaq fell 0.2% to 12,368.98. Smaller company stocks also gave back some of their recent gains, nudging the Russell 2000 0.1% lower to 1,883.31.

Bond yields mostly fell. The yield on the 10-year Treasury, which influences mortgage rates, fell to 2.60% from 2.65% late Friday.

August’s subdued opening follows a solid rally for stocks last month: July was the best month for the S&P 500 index since November 2020. But this week’s array of economic reports and company earnings has left traders “a little cautious,” said Lindsey Bell, chief markets and money strategist at Ally Invest.

“Investors are still assessing where we break from here – further to the upside or reverse course,” Bell said.

Banks, health care companies and tech stocks were among the biggest weights on the S&P 500. JPMorgan Chase fell 1%, UnitedHealth Group dropped 1.3% and Intuit slid 1.7%.

U.S. crude oil prices fell 4.8%, dragging energy stocks lower. Exxon Mobil lost 2.5%.

Those losses outweighed solid gains by retailers and consumer products makers. Target rose 1.3% and Procter & Gamble rose 2.9%.

Boeing jumped 6.1% for the biggest gain in the S&P 500 after it cleared a key hurdle with federal regulators and could soon resume deliveries of its large 787 airliner.

Stocks have been falling for much of the year as investors worry about high inflation and rising interest rates. A key concern remains whether central banks will raise interest rates too aggressively and push economies into a recession.

A report last week showed that the U.S. economy contracted last quarter and could be in a recession. Stocks’ recent rally came as worrisome economic reports gave some investors confidence that the Fed can dial back its aggressive pace of rate hikes sooner than expected.

More than half of the companies in the S&P 500 have reported their latest earnings results, which have been mostly better than expected. Many companies have also warned that inflation is hurting consumer spending and squeezing operations. Businesses have been raising prices to try to keep up profits.

Wall Street will also get several updates on the job market, which has remained strong. The Labor Department will release its June survey on job openings and labor turnover on Tuesday and its closely-watched monthly employment report for July on Friday.

A surge in oil prices throughout the year only worsened the impact from inflation. U.S. crude oil prices are up roughly 25% in 2022 and that has raised gasoline prices in the U.S. to record levels.

In energy trading, benchmark U.S. crude lost 66 cents to $93.23 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, fell 86 cents to $99.17 a barrel.

In currency trading, the U.S. dollar edged down to 130.68 Japanese yen from 131.64 yen. The euro cost $1.0271, up from $1.0263.

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AP Business Writers Damian J. Troise and Alex Veiga contributed.

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Yuri Kageyama is on Twitter https://twitter.com/yurikageyama