By Gina Lee

Investing.com – Asia Pacific stocks were down on Tuesday morning, alongside U.S. equity futures. U.S. share prices closed in a volatile session on Tuesday morning as fears over tightening of the U.S. Federal Reserve’s monetary policy and increasing geopolitical tension grow.

Japan’s fell 2.01% by 9:24 PM ET (2:24 AM GMT) and South Korea’s fell 2.33%

Australia saw a drop of 2.46%. It is the country’s and earlier in the morning.

Hong Kong’s fell 1.67%.

China’s was down 0.93% and the was down 0.69%. Developer China Evergrande Group (HK:) urged offshore bondholders to refrain from aggressive legal action over repayments, in response to an ad-hoc group of the company’s overseas creditors threatening to take enforcement measures.

While the U.S. equity markets retreated, dip buyers managed to keep U.S. stocks in green despite the fact that they were trading at high volumes. This was a sharp U-turn from a selloff in Monday’s session amid a 4% drop in U.S. equities.

Investors will carefully monitor the Wednesday’s announcement. Over expectations that the central banks will raise interest rates earlier than anticipated, and uneven earnings from companies, global shares have fallen more than 6 percent in January.

Now investors need to determine if the fall represents a buying opportunity, or an indication of more stress across other asset classes.

“Volatility is back,” RBC Capital Markets head of U.S. equity strategy Lori Calvasina told Bloomberg.

“We’re having a sea-change in terms of Fed policy. Equity investors frankly have been behind the curve in anticipating what’s coming, so there’s a lot of catch-up to do.”

Cboe Volatility Index reached its highest in almost a full year. It then declined.

The stock recovery could come sooner than expected and “it’s time to make shopping lists and look for ‘babies that got thrown out with the bathwater,’” Oppenheimer strategists led by John Stoltzfus said in a note on Monday.

However, other investors, including Wharton School of the University of Pennsylvania professor and author of “Stocks for the Long Run” Jeremy Siegel, warned that a challenging quarter lies ahead.

“I’m still very positive on long-term equities but I think it’s in for a rocky time the next two or three months. We have to get used to the fact that the Fed is going to be much more hawkish,” he said.

The geopolitical tensions surrounding Ukraine continue to escalate. To support NATO forces in Eastern Europe and the United States, up to 8,500 soldiers are being kept on high alert.

The International Monetary Fund is launching the World Economic Outlook Update, and the U.S. will release its later in the afternoon.