BANGKOK (AP) — The U.S. and Israeli attacks on Iran rattled world markets on Monday, with U.S. futures initially falling more than 1% and oil prices soaring, though both moderated as trading picked up.

The futures for the S&P 500 and Dow Jones Industrial Average were down about 0.8% by mid-morning in Bangkok.

Asian shares opened lower.

Japan’s Nikkei 225 index initially fell more than 2%, but by midday Tokyo time it was down 1.5% at 57,981.54.

In Hong Kong, the Hang Seng lost 1.6% to 26,215.91, and the Shanghai Composite index was flat at 4,163.01.

Taiwan’s benchmark lost 0.6% and Singapore’s dropped 1.9%. In Bangkok, the SET fell 2.1%.

Australia’s S&P/ASX 200 shed 0.3% to 9,173.50.

Markets were closed in South Korea for a holiday.

The price of gold, usually viewed as a safe haven for investment in times of uncertainty, rose 2.4% to about $5,371 per ounce.

Traders were betting the supply of oil from Iran and elsewhere in the Middle East would slow or grind to a halt. Attacks throughout the region, including on two vessels traveling through the Strait of Hormuz, the narrow mouth of the Persian Gulf, have restricted countries’ ability to export oil to the rest of the world.

“Roughly one-fifth of global oil and LNG (liquefied natural gas) flows squeeze through the Strait of Hormuz. This is not an obscure canal. It is the aorta of the global energy system,” Stephen Innes of SPI Asset Management said in a commentary.

The price of a barrel of U.S. benchmark crude oil initially surged about 8%. It later was trading 5.9% higher at $71.00 per barrel. Brent crude jumped 6.2% to $77.38 per barrel.

A prolonged war would likely result in higher prices for other fuels and gasoline and could cascade throughout the global economy, adding to production costs overall.

Likewise, prolonged interruptions to oil flows through the Middle East would have “huge implications for oil and LNG and every market everywhere if it occurs. Energy is an input to ALL production,” RaboResearch Global Economics & Markets said in a report.

Iran exports roughly 1.6 million barrels of oil a day, mostly to China. It may need to look elsewhere for supply if Iran’s exports are disrupted, another factor that could increase energy prices.

But China has ample oil reserves of up to 1.5 billion barrels, and it can offset a decline in oil from Iran by increasing imports from Russia, said Michael Langham of Aberdeen Investments.

The attacks were anticipated, with a massive buildup of U.S. forces in the Middle East, so traders had adjusted their positions to take that risk into account.

The conflict has shifted attention, for now, away from issues surrounding artificial intelligence that have dominated markets in recent months.

On Friday, the S&P 500 fell 0.4% to finish just its second losing month in the last 10. The Dow industrials dropped 1.1%, and the Nasdaq composite fell 0.9%.

Treasury yields fell in the bond market as investors sought safer places for their money.

“When markets are fragile, they do not need a knockout blow. They just need another weight on the bar,” Innes said.

Also hurting the broad market was a report Friday showing that inflation at the U.S. wholesale level was at 2.9% last month, much higher than the 1.6% that economists expected.

That could pressure the Federal Reserve to hold off longer on its cuts to interest rates. Lower rates would give the economy and prices for investments a boost, but they risk worsening inflation at the same time.

In other dealings early Monday, the U.S. dollar rose to 156.34 Japanese yen from 156.27 late Friday. The euro slipped to $1.1789 from $1.1762.

Elaine Kurtenbach, The Associated Press