Markets in the Asia-Pacific region are predicted to open with gains following Powell's indication of smaller rate cuts.

• On Tuesday, public holidays are observed in South Korea, Hong Kong, and mainland China.

On Tuesday, Asia-Pacific markets are expected to open higher, following Federal Reserve Chair Jerome Powell's statement that the recent significant cuts made by the U.S. central bank should not be taken as an indication that future actions will be as forceful.

"During a Q&A session with Morgan Stanley economist Ellen Zentner, he stated that the committee does not feel rushed to quickly lower rates. If the economy performs as anticipated, it would result in two additional rate cuts this year, totaling 50 basis points."

The federal funds rate is currently at 4.75%-5%, and it is expected to decrease by an additional 50 basis points, bringing the Fed's benchmark interest rate to 4.25%-4.5% by the end of 2024.

In Japan, large companies' business optimism will be the focus of traders, as measured by the Bank of Japan's Tankan survey, which assesses economic conditions in the country and serves as a crucial economic indicator.

The unemployment rate in Japan for August is predicted by economists surveyed by Reuters to be 2.6%, a decrease from the 2.7% recorded in July.

The public holiday in South Korea, Hong Kong, and mainland China has caused some Asian markets to close. Mainland China will remain closed until the end of the week due to the Golden Week holiday.

The S&P/ASX 200 futures for Australia were at 8,274, a slight increase from its previous close of 8,269.8.

After the market fell 4.8% on Monday, Japan's futures are predicted to recover, with the Chicago contract at 38,355 and the Osaka contract at 38,210, compared to the previous close of 37,919.55.

In the U.S., the S&P 500 reached a new record close on Monday, ending a successful month and quarter with a 0.42% increase to 5,762.48.

The Dow Jones Industrial Average and Nasdaq Composite both closed at new records, with the Dow gaining marginally to 42,330.15 and the Nasdaq advancing 0.38%.

—CNBC's Alex Harring and Hakyung Kim contributed to this report.