That sent the yield on the 10-year Treasury up to 4.43% from 4.36% late Thursday. Higher yields can tug down on prices for stocks and other investments, while making it more expensive for U.S. companies and households to borrow money.

FRANKFURT, Germany (AP) — Oil surged, stocks fell and investors sought safety in the U.S. dollar and government bonds Friday after Israel struck Iranian nuclear and military targets in an attack that raised the risk of war between the two countries and broader instability in the Middle East.

Rather, it is geopolitical factors—specifically, escalating tensions in the Middle East—that are unsettling markets and pushing prices higher.

Critical energy infrastructure in Israel and Iran has not escaped unscathed from the first few days of the countries' escalated conflict. Worst-case scenarios have yet to be realized, but the war is already having a notable impact on energy production and exports in both countries.

Oil prices surged, stocks dropped and investors flocked to safe havens like gold on Friday after tensions between Israel and Iran escalated, stoking concerns of a broader conflict in the region.

Although the U.S. is a net oil exporter, higher oil prices could increase inflation and lower economic growth.

At the moment, the impact on U.S. energy prices of Israel’s strikes on Iran is muted. That could change if the conflict escalates.

Stock futures in the U.S. dropped and global oil prices jumped following an Israeli strike targeting Iran's nuclear facilities.

The strongest action was in the oil market, where the price of a barrel of benchmark ... the situation was not escalating and there was no impact on oil supply,” according to Richard Joswick ...