1. G7 to unite against Syria

Markets kept an eye on the rising geopolitical tension as foreign affairs ministers from the Group of Seven (G7) major global powers were joined by Middle East allies at their second day of meetings in Italy in the hopes of establishing a united front against Syrian President Bashar al-Assad.

Pressure is building on Russian President Vladimir Putin to break ties with Assad, whose forces stand accused of launching a nerve gas attack on a rebel-held town last week that killed 87 people including 31 children.

Both Russia and Iran said the U.S. had passed “red lines” after launching a retaliatory attack on a Syrian air base but U.S. President Donald Trump is open to authorizing additional strikes on Syria if its government uses chemical weapons again or deploys barrel bombs in the country, the White House said on Monday.

U.S. Secretary of State Rex Tillerson was set to visit Moscow Wednesday in what would be his first diplomatic mission, but the Kremlin announced Monday that Tillerson and Russian President Vladimir Putin will not meet in what could be a sign of increased tensions between the two countries.

2. Tension mounts between U.S. and North Korea

South Korea's acting president warned on Tuesday of "greater provocations" by North Korea as tension on the Korean peninsula rises over concern the North may conduct a test of its military hardware in coming days.

A U.S. Navy strike group led by a nuclear-powered aircraft carrier is en route to the western Pacific with talk of military action by the United States gaining traction following its strikes last week against Syria.

The North's foreign ministry, in a statement carried by its KCNA news agency earlier on Tuesday, said the U.S. navy strike group's move near the Korean peninsula showed America's "reckless moves for invading had reached a serious phase".

3. Markets wary of geopolitical tension

Global equities showed mixed trade on Tuesday with European stocks and U.S. futures trading mostly lower as heightened geopolitical tensions over Syria and North Korea kept investors on edge.

At 9:55 GMT, the benchmark Euro Stoxx 50 lost 0.35%, Germany's DAX fell 0.15% and France’s CAC 40 slipped 0.01%, London’s FTSE 100 broke the general trend with gains of 0.58%.

Meanwhile, U.S. futures pointed to a slightly lower open. The blue-chip Dow futures slipped 0.03%, S&P 500 futures dropped 0.05% and the Nasdaq 100 futures edged down 0.03%.

Meanwhile, Oil prices eased from a 5-week high on Tuesday as investors opted to take profit from an almost week-long rally that had shown returns of 5.4% ahead of weekly data on U.S. inventories.

Market players looked ahead to the American Petroleum Institute’s its weekly report on crude inventories at 20:30 GMT Tuesday.

Official government figures will be released on Wednesday amid expectations for a build of 0.316 million barrels.

4. Yellen keeps optimistic views

Federal Reserve (Fed) chair Janet Yellen offered little insight into the U.S. monetary policy after the market close on Monday as she maintained her previous view that rate hikes should be gradual in order to allow “the economy to kind of coast” in order to avoid overheating.

"Whereas before we had our foot pressed down on the gas pedal trying to give the economy all the oomph we possibly could, now allowing the economy to kind of coast and remain on an even keel - to give it some gas but not so much that we are pressing down hard on the accelerator - that’s a better stance of monetary policy," she said.

"We want to be ahead of the curve and not behind it," Yellen explained.

Markets continued to price in the next rate hike for the June meeting with odds standing at around 59%.

On a light economic calendar Tuesday, the U.S. Bureau of Labor Statistics will release the Job Openings and Labor Turnover Survey at 16:00 GMT.