US 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 per cent and benchmark US Treasury yields tumbled 10 basis points. Iran fired several rockets at two joint US-Iraqi bases early Wednesday morning in retaliation for the killing of a top Iranian military leader by the US Japanese shares headed for the biggest slide since March, with equities also lower in Sydney and Seoul. Gold advanced.
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"Markets will likely remain nervous," Mitul Kotecha, a strategist at TD Securities, said. "Much now depends on the US reaction and whether there is further escalation."