(Bloomberg) -- U.S. stock futures slumped along with Asian equities and oil prices surged after Iran started an attack on military facilities in Iraq hosting American troops, escalating tensions in the Middle East. Treasuries and the yen rose as haven assets caught a bid.
Futures on the S&P 500 Index dropped more than 1.5% and benchmark U.S. Treasury yields tumbled 10 basis points. Iran fired several rockets at two joint U.S.-Iraqi bases early Wednesday morning in retaliation for the killing of a top Iranian military leader by the U.S. Japanese shares headed for the biggest slide since March, with equities also lower in Sydney and Seoul. Gold advanced.
"Markets will likely remain nervous," Mitul Kotecha, a strategist at TD Securities, said. "Much now depends on the U.S. reaction and whether there is further escalation."
Caution is returning to markets after a bumper 2019 for a range of asset classes amid signs hostilities are moving on to the next stage following the airstrike that killed General Qassem Soleimani last week. Meantime, investors continue to weigh developments on the trade front with the first phase of the U.S.-China trade deal expected by many to be signed on Jan. 15.
Here are some events to watch for this week:
These are moves in major markets:
--With assistance from Cormac Mullen.
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