e3ql0}qn}q9tjkmr2acnkvj}_media_dl_1.png Bloomberg, Deutsche Bank

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(Bloomberg) — Oil rose and US equity-index futures fell after the US launched another round of strikes against Iran, while conflicting claims over the status of the Strait of Hormuz heightened uncertainty.

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Brent crude climbed more than 3% to $78.40 a barrel on concerns over potential supply disruptions. Australian bonds dropped with Treasury futures, while the dollar strengthened against most of its Group-of-10 peers. Nasdaq 100 futures retreated 0.5%.

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Precious metals slid, with gold losing 1.2% to about $4,070 an ounce, while silver dropped 2%, as higher oil prices and inflation concerns boost the prospect for higher interest rates. Bitcoin fell 0.6% to trade around $63,800.

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“The latest developments over the weekend suggest markets may face a volatile start to trading which could test the glass half full mentality we have seen recently,” Nick Twidale, chief market analyst at AT Global Markets, wrote in a note to clients.

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Renewed tensions in the Middle East come at a pivotal time for markets as investors brace for the start of the earnings season, with Goldman Sachs Group Inc. and JPMorgan Chase & Co. due to report Tuesday. S&P 500 companies are expected to post a 24% jump in second-quarter profits, providing a key test of whether earnings can justify a rally fueled by optimism over artificial intelligence.

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Earlier, the US military launched strikes Sunday aimed at further weakening Iran’s ability to strike civilian vessels transiting the Strait of Hormuz, the US Central Command said. The latest action followed Iranian drone and missile attacks on US allies including Kuwait, Jordan and Qatar.

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What Bloomberg Strategists Say…

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US bonds are also vulnerable to more losses should oil prices stay firm as short positioning in Treasury futures is well below the extremes seen in August and September last year and within the range seen since early February. That suggests the oil-bonds-dollar nexus will continue to play out in the near term.

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— Mark Cranfield, MLIV. To read the full analysis, click here.

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Confusion over the status of the Strait of Hormuz added to the uncertainty, with Iran saying it had closed the waterway, while the US military and maritime authorities said shipping continued through its southern route.

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In Europe, Deutsche Bank strategists expect Stoxx 600 firms to report a 12% jump in second-quarter earnings, following a 7% rise in the first quarter. Profits for MSCI Asia Pacific constituents are estimated to rise 39%, up from 6.9% in the previous three months, data compiled by Bloomberg show.

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The outlook is being tested by persistent inflation, higher energy prices and growing expectations the Federal Reserve may resume raising interest rates, threatening profit margins. With US and global equities trading near record highs and valuations elevated, investors see little room for disappointing results.