MSCI's broadest index of Asia-Pacific shares outside Japan - .MIAPJ0000PUS - was down 0.9%.
Australian shares S&P/ASX200 .AXJO sank 5% in early trade, while Japan's Nikkei stock index .N225 was down 1.74%.
In Hong Kong, the Hang Seng Index .HSI slipped 1.44% and China's CSI300 Index .CSI300 was down nearly 1% at the open.
The negative tone in Asia follows a bleak session in the US on Monday, which saw Goldman Sachs forecast a 75 basis point interest rate hike at the Federal Reserve's next policy meeting on Wednesday.
"The US will see rate rises faster and higher than Wall Street has been expecting," James Rosenberg, Ord Minnett advisor in Sydney told Reuters. "There will likely be the double impact of earnings forecasts being trimmed and further price to earnings derating."
Expectations for aggressive US rate hikes rose after inflation in the year to May shot up by a sharper than predicted 8.6%.
Fears of higher rates leading to a US recession kicked the S&P 500 .SPX down 3.88%, while the Nasdaq Composite .IXIC lost 4.68%. The Dow Jones Industrial Average .DJI fell 2.8%.
The benchmark S&P 500 is now down more than 20% from its most recent record closing high, confirming a bear market, according to a commonly used definition.
In US trading, benchmark 10-year Treasury yields hit their highest since 2011 on Monday and a key part of the yield curve inverted for the first time since April as investors braced for the prospect that attempts to stem soaring inflation would dent the economy.
Early in Asia, the yield on benchmark 10-year Treasury notes US10YT=RR rose to 3.3828% compared with its US close of 3.371% on Monday.
The two-year yield US2YT=RR, which rises with traders' expectations of higher Fed fund rates, touched 3.4002% compared with a U.S. close of 3.281%.
"Higher inflation, slower growth and higher interest rates are a damaging combination for financial assets," ANZ strategists wrote on Tuesday.
The dollar dropped 0.06% against the yen to 134.32 JPY= but remains close to its more-than-two-decade high of 135.17 reached on Monday.
The European single currency EUR= was flat at $1.0407, having lost 3.04% in a month, while the dollar index =USD, which tracks the greenback against a basket of major currencies, was up at 105.19.
Bitcoin BTC=BTSP fell around 4.5% on Tuesday to $21,416, a fresh 18 month low, extending Monday's 15% fall as markets were jolted by crypto lender Celsius suspending withdrawals.
U.S. crude CLc1 dipped 0.06% to $122.14 a barrel. Brent crude LCOc1 was down 0.13% 122.14 per barrel.
Gold was slightly lower with the spot price XAU= at $1,818.7395 per ounce.
