Global markets stocks fell after a volley of attacks on energy facilities around the Persian Gulf drove oil to near US$100 a barrel while Canadian countertariffs took effect against the U.S. on $28-billion worth of goods.

Wall Street futures were mixed with the Nasdaq pointing higher after major North American markets were closed yesterday for a holiday.

TSX futures were in the red.

“The inflation picture is becoming murkier because of the rally in oil prices. The military activity is maintaining a significant risk premium in energy markets amidst the heightened possibility of deeper and more protracted disruptions to global supply,” said Kyle Rodda, senior financial market analyst at Capital.com.

Overseas, the pan-European STOXX 600 was down 0.18 per cent in morning trading. Britain’s FTSE 100 was little changed, Germany’s DAX dropped 0.33 per cent and France’s CAC 40 gave back 0.21 per cent.

In Asia, Japan’s Nikkei closed 1.7 per cent lower, while Hong Kong’s Hang Seng declined 0.38 per cent.

Oil prices hit multiweek highs after Iran-backed Houthis attacked Saudi energy facilities and Tehran threatened the United States with “economic warfare.”

Brent crude futures were up 1.7 per cent to US$98.72 a barrel. West Texas Intermediate (WTI) crude traded at US$94.04 a barrel, up 2.8 per cent. 

“The price action reflects both genuine physical tightness — tanker flows through Hormuz remain well below normal — and a clear geopolitical risk premium. Right now the risk premium is doing a lot of the heavy lifting,” said Tim Waterer, chief market analyst at KCM Trade.

“As for the rest of the year, oil looks set to remain elevated while the Strait stays contested and diplomatic progress remains fragile.”

In other commodities, spot gold fell 0.3 per cent to US$4,390.50 an ounce, while U.S. gold futures for December delivery dropped 0.9 per cent to US$4,435.00.

The Canadian dollar strengthened against its U.S. counterpart.

The day range on the loonie was 72.34 US cents to 72.60 US cents in early trading. The Canadian dollar was up about 0.87 per cent against the greenback over the past month. It traded at $1.3808 per US$1.

The U.S. dollar index, which weighs the greenback against a group of currencies, fell 0.21 per cent to 98.96.

The euro slid 0.09 per cent to US$1.1613. The British pound dropped 0.07 per cent to US$1.3531.

In bonds, the yield on the U.S. 10-year note was last up at 4.804 per cent.

The Japanese yen jumped as much as 1 per cent to 152.89, its strongest level since Feb. 18, as investors unwound an estimated US$2.35-trillion in yen-funded carry trades.

China’s CPI, PPI, aggregate yuan financing and new yuan loans

Japan’s real cash earnings, banking lending and GDP

Germany’s trade surplus

6 a.m. ET: U.S. NFIB Small Business Economic Trends Survey for August.

3 p.m. ET: U.S. consumer credit for July.

Also: Canada and U.S. Manpower Survey for Q4

With Reuters and The Canadian Press