Oil prices spike 9% and stock futures tumble in first trading since weekend attacks on Iran

• Oil prices surged and stock futures tumbled as traders positioned for the week following strikes on Iran.
• Brent crude spiked 9% and WTI jumped 7% amid threats to global energy flows.
• Iran attacked ships passing through the Strait of Hormuz on Sunday.

Markets were reeling ahead of the new week, with oil surging and US stock futures tumbling on Sunday evening after the weekend attacks against Iran by the US and Israel.

Here's a rundown of what major assets are doing:

Oil

Brent oil, the international benchmark, spiked 9% and WTI crude jumped 7%. Energy traders are preparing for the possibility that the Strait of Hormuz, a critical shipping route for global energy commodities, is closed for an extended period.

"The immediate price shocks are being accompanied by a fresh wave of supply chain disruptions. This isn't just a question of whether the Straits of Hormuz are physically closed; the logistical friction is already here," economist Mohamed El-Erian wrote, pointing to insurance costs, maritime cargo, and aviation as having already been significantly disrupted.

Barclays analysts on Saturday described the situation as the "worst fears" for oil, though analysts on Sunday said other energy commodities were also at high risk of repricing.

"Qatar has the world's third-largest LNG export capacity, and ~20% of global LNG trade transits the Strait of Hormuz (primarily Qatari volumes), which makes shipping risk a gas-market event as much as an oil-market event," strategists at Franklin Templeton wrote on Sunday.

They described the Strait of Hormuz as "the macro circuit breaker," and noted that global shipping costs had already risen in the day after the initial attacks.

Higher oil prices risk stoking inflation, and analysts have flagged in the aftermath of other recent conflicts that a sudden spike in energy prices could also tip the global economy into a recession.

Stock futures

US stocks traded sharply lower as traders assessed the potential for a prolonged conflict. Some noted on Sunday evening that markets currently perceive a low risk that the war drags on for a long time or spills into a wider regional conflict.

"There are additional key market transmission channels to monitor if uncertainty persists," Adam Hetts, global head of multi-asset at Janus Henderson, said on Sunday. "Broader uncertainty suppresses investor sentiment, which can broadly weigh on risk-assets globally. This would likely make global developed market sovereigns, including U.S. Treasuries, and safe-haven currencies more attractive."

Hetts added that in a prolonged period of uncertainty, higher oil prices would spark a global inflation scare, which could slash the likelihood of rate cuts by the Federal Reserve this year.

Gold

The precious metal climbed 2%.