U.S. small business sentiment fell to its lowest since May 2023 in January, according to a report published Tuesday, as labor costs and slowed sales squeeze bottom lines.

Headline annual U.S. inflation decelerated to 3.1% in January, but was faster than economists' projections, in a key economic release that could impact how Federal Reserve officials view the timing of potential interest rate cuts.

U.S. consumer prices rose more than expected in January amid a surge in the cost of rental housing, but the pick-up in inflation did not change expectations the Federal Reserve will start cutting interest rates in the first half of this year.

Asian shares tracked a negative lead from Wall Street on Wednesday, while the dollar and Treasury yields jumped as traders pared back expectations for the pace and scale of rate cuts by the Federal Reserve this year.

Oil prices fell in early Asian trade on Wednesday after a U.S. industry group reported crude stocks rose more than expected last week and as investors reined in expectations for interest rate cuts by the U.S. Federal Reserve.

The dollar traded near three-month highs to major peers on Wednesday as traders pushed back bets for a first Federal Reserve interest rate cut following surprisingly hot U.S. inflation figures overnight.