Oil prices surged more than 5% on Wednesday and global stocks and bond prices tumbled as investors fled risk assets after U.S. President Donald Trump said the memorandum of understanding signed with Iran to end the Gulf conflict was “over”.

Wall Street opened lower as rebuilding tensions in the Middle East weighed on sentiment, further bolstered by a new warning from the International Monetary Fund that the conflict will cut into global growth this year.

Investors will also be closely watching Fed meeting minutes due out later Wednesday, the first under new Chairman Kevin Warsh, for hints on how he may steer the central bank’s policy and messaging.

The Dow Jones Industrial Average was down nearly 1% in early trading, with the S&P 500 falling 0.52% and the Nasdaq Composite dropping 0.38%.

The stock selloff hit globally, with European shares dropping 1%. MSCI’s gauge of stocks across the globe fell 0.71%.

Trump, who was speaking in Ankara where he was attending a NATO summit, added that he did not want to engage in talks with Tehran. “As far as I’m concerned, it’s just a waste of time dealing with them,” he said.

Oil Prices Climb

Market sentiment was already fragile after U.S. and Iranian forces had traded attacks in the Gulf.

Brent crude futures leapt 5.65%, the most in a day since late May, to $78.42 a barrel. U.S. crude rose 5.28% to $74.21 a barrel.

While that was well shy of the peaks above $120 seen at the height of the conflict, it was enough to inject some fresh inflation risk into the bond market, particularly since months of conflict have drawn down global oil inventories.

Data this week showed crude stocks in the U.S. Strategic Petroleum Reserve hit their lowest level since 1983, leaving markets more vulnerable to future supply shocks.

“It’s clearly not what the market’s wanted and it really weighs heavily on sentiment,” Chris Beauchamp, chief market strategist at IG, said.

Benchmark 10-year U.S. Treasury note yields rose for a seventh day to a one-month high of 4.58%.

The VIX volatility index was up 8.8%, although it was still below the highs in March.

The stock market has already been under some pressure in recent weeks as investors are increasingly questioning the valuations of some of this year’s top-performing semiconductor and AI-linked stocks.

Samsung Electronics shares slid for a second straight session on Wednesday, despite the company flagging a 19-fold rise in profit. Analysts and investors are concerned that memory chip demand may slow in the second half of the year.

In currency markets the dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.07% to 101.1. The yen hovered around 162.5, not far from 40-year lows.

(Reporting Amanda Cooper in London and Pete Schroeder in Washington; additional reporting by Tom Westbrook in Singapore; Editing by Kevin Buckland, Jan Harvey and Hugh Lawson)