Asian markets fell Wednesday after Wall Street fell the most since June 2020, as a report showed that inflation maintains a surprisingly strong grip on the U.S. economy.

Tuesday’s report showed that U.S. inflation slowed only to 8.3 percent in August, not the 8.1 percent economists had expected. That dashed hopes that inflation was returning to more normal levels after peaking at 9.1% in June, allowing the Federal Reserve to ease interest rate hikes.

Tensions between the U.S. and China have also affected sentiment. Chinese leader Xi Jinping and Russian President Vladimir Putin are scheduled to meet later this week, highlighting the warming of relations between the countries while the West continues to impose sanctions against Moscow for its invasion of Ukraine.

Thursday’s meeting in Samarkand, Uzbekistan, on the sidelines of a security pact summit dominated by Moscow and Beijing, reflects the strong ties between the former communist rivals, now locked in a rivalry with the United States.

Meanwhile, the U.S. is reportedly considering new sanctions against Beijing aimed at deterring aggression against Taiwan, a self-governing island democracy that China claims as its own territory.