Crude oil prices surged and U.S. stock market futures tumbled late Tuesday after Iran fired multiple missiles at air bases in Iraq housing U.S. troops, raising fears of a wider Middle East conflict.

Iranian state TV described the attack as a revenge operation over the killing of Revolutionary Guard Gen. Qassem Soleimani by a U.S. airstrike last week. U.S. officials confirmed missile strikes at two bases in Iraq, but there was no immediate word on damage or casualties.

The attacks — and the near certainty of U.S. retaliation — raise the possibility of oil supply disruptions, as well as the possibility of violence spreading around the already tumultuous region.

After closing lower for the first time in three days in Tuesday’s regular trading session, oil prices rose sharply after news of the attack. The U.S. benchmark, West Texas Intermediate crude for February delivery

CLG20, +2.65%

 , jumped more than 4% in electronic trading, up from a settlement of $62.70 Tuesday on the New York Mercantile Exchange. March Brent crude

BRNH20, +2.75%

 , the global benchmark, began electronic trading at 8 p.m. Eastern up more than 4%. Prices for both benchmarks moderated somewhat as trading went on, and were last up around 3.5%.

Dow Jones Industrial Average futures

YM00, -0.87%

  fell more than 400 points immediately after the attack, and were most recently down about 350 points. S&P 500

ES00, -0.94%

  and Nasdaq Composite futures

NQ00, -1.13%

  tumbled as well.

“It’s not going to be pretty today,” Stephen Innes, chief Asia market strategist at AxiTrader, said in a note. “Global equities are being hit, and the need for defensive strategies is paramount. There is no denying the enormity of long-term geopolitical repercussions of the latest events as oil, bond, and gold defensive strategy flows are providing the lead-in for the local cash market opens.”

At least one analyst recommended that investors shouldn’t overreact in the short term.

“It will take some time to sort through the news to have a better feel for what it could mean to markets,” David Bahnsen, chief investment officer of The Bahnsen Group, said in an email Tuesday night. “What we know when Dow futures drop 400 points a day before a market open is that the majority of the time the market either closes much worse, or frequently much better. The initial response is usually not the right one. Investors would be wise to watch the response not just in equities, but in oil prices and in bond yields. And they would really be wise to watch the response over several days and maybe weeks, not minutes or hours.”

February gold

GCG20, +1.42%

  surged past the $1,600 level — its highest since 2013 — after settling Tuesday at $1,574.30 on Comex.

“Gold will be very volatile,” and American reaction will be closely watched, Chintan Karnani, chief market analyst at Insignia Consultants in New Delhi, told MarketWatch. If President Donald Trump “reacts with aggression, then gold will break past $2,000.” (That would mark an all-time high for gold prices.)

MarketWatch reporter Myra Saefong contributed to this report.

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2020-01-07