Asian shares mostly fell on Monday as oil prices decreased following their rise to the highest levels in over four years last week. U.S. futures showed modest gains, but investors remained cautious ahead of significant earnings reports and central bank decisions expected this week that could impact market stability.

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In Japan, the Nikkei 225 index fell 0.1% to 62,602.86, while South Korea's Kospi dropped 1.1% to 5,494.29. The Hang Seng index in Hong Kong edged up 0.2% to 23,137.93, but the Shanghai Composite decreased 0.4% to 3,673.83. Australia's S&P/ASX 200 also saw a slight decline, shedding 0.2% to 8,782.30.

Oil prices experienced significant reductions, with Brent crude, the international benchmark, falling 1.3% to $110.23 per barrel, and U.S. benchmark crude decreasing 1.7% to $101.52 per barrel. Last Friday, Brent crude had rising 3.1% to settle at $116.72, the highest price since June 2022, having surged from below $97 since early October.

On Wall Street, the S&P 500 declined 0.5%, marking its second consecutive weekly loss. The Dow Jones Industrial Average fell by 1.2%, while the Nasdaq composite lost 0.2% after recovering slightly.

Despite the overall market downturn, several AI-related companies showed gains. Micron Technology rose 2.5%, Intel increased by 1.7%, Microsoft gained 0.7%, and Advanced Micro Devices saw a 1.7% increase. However, concerns persist regarding whether the high valuations of these companies are justified, particularly as many have taken on debt to fund AI investments amidst rising interest rates.

Stephen Innes from SPI Asset Management noted that this week’s market movements would hinge on the financial results from major tech companies, including Alphabet, Microsoft, and Amazon. Investors are looking for evidence that the substantial investments in computing infrastructure are generating sustainable profits.

Industrial sectors faced tougher losses, with Caterpillar decreasing by 2.4% and American Express dropping 3.7%. Despite American Express exceeding profit expectations in its most recent quarter, the company announced significant job cuts, contributing to its stock decline.

U.S. Treasury yields rose slightly after a notable drop on Thursday, reflecting global concerns about rising government debt levels and persistent inflation, which remains above 3% in the U.S. The Federal Reserve raised its benchmark interest rate recently to attempt to control inflation and is expected to maintain current rates at its upcoming meeting, with another rate hike anticipated in December.

This week will also deliver key economic updates, including the personal consumption expenditures index, expected to show a 3.7% inflation rate in September, well above the Fed's 2% target. The ongoing conflict involving the U.S. and Iran continues to affect global oil supply, exacerbating rises in energy prices and contributing to overall inflationary pressures.

Early Monday, the dollar slipped to 156.79 Japanese yen from 156.99 yen, while the euro remained stable at $1.1223.