Asian markets news: Shares stuttered on Wednesday as a blast at a Gaza hospital dealt a blow to hopes for containing the crisis, while bonds nursed heavy losses as strong U.S. retail data argued for a punishingly long stretch of high rates.

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Israeli and Palestinian authorities were trading blame for the blast that killed hundreds at the hospital, complicating U.S. President Joe Biden's already fraught trip to the region.

The news contributed to a spike in oil prices as investors worried Iran or other nations could get pulled into the conflict.

"We judge the risks are tilted towards escalation and spread of the Israel-Hamas conflict to other countries in the Middle East," warned analysts at CBA in a note. "A major spike in volatility and a downgrade of the global economic growth outlook is possible."

The threat to the global economy comes just as China is set to release data likely showing annual economic growth slowed sharply in the third quarter to around 4.4 per cent.

Figures for retail sales and industrial output for September will also offer insight into whether activity is finally responding to Beijing's recent stimulus measures.

The cautious mood left MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) a shade lower, while Japan's Nikkei (.N225) dipped 0.1 per cent.

S&P 500 futures and Nasdaq futures both eased 0.2 per cent in early trade.

They were dragged in part by a drop in Nvidia after news the Biden administration plans to halt shipments to China of more of its advanced artificial intelligence chips.

Markets are now anxiously awaiting earnings from Netflix and Tesla later in the session.

Stocks were also pressured by a jump in bond yields after a barnstorming report on September U.S retail sales sent analysts scurrying to revise up forecasts for economic growth for both the third and fourth quarters.

JPMorgan jacked its growth call up to an annualised 4.3 per cent, from 3.5 per cent, while the influential Atlanta Fed GDPNow prediction jumped to a heady 5.4 per cent.

Markets reacted by pricing in more risk the Federal Reserve will be forced to hike again. A move in November is still seen as just an 11 per cent chance, but January climbed to 50 per cent from 37 per cent.

The market also again scaled back expectations for early rate cuts, with no chance of a move until June and around 54 basis points of easing implied for all of 2024.

Bonds took that badly, with two-year yields surging as much as 14 basis points on Tuesday to a 16-year peak of 5.24 per cent. The two-year was last at 5.22 per cent, while ten-year yields were back near recent highs at 4.84 per cent.

The rise in yields underpinned the U.S. dollar, particularly on the low-yielding Japanese yen where the dollar reached 149.77 to again threaten major resistance at 150.00.

The euro eased back a touch to $1.0573 , having been as high as $1.0595 on Tuesday.

Safe-haven flows supported gold at $1,924 an ounce , well above its recent trough of $1,809.

Oil prices swung higher once more, driven by data showing a fall in crude stocks and amid concerns over the Middle East.

Brent climbed $1.35 to $91.25 a barrel, while U.S. crude rose $1.62 to $88.28 per barrel.