Global markets slid as renewed fighting in the Middle East lifted oil prices and investors worried about inflation and braced for a slew of interest ⁠rate hikes.

Wall Street futures were in the red after major North American markets closed down yesterday.

TSX futures followed sentiment lower.

In Canada, investors are getting results from Alimentation Couche-Tard Inc.

On Wall Street, markets are watching earnings from Dell Technologies Inc., Palo Alto Networks Inc. and Medtronic PLC.

The surge in energy prices as well as hawkish remarks ​from Federal Reserve Chair Kevin Warsh last week have prompted investors ⁠to price in interest rate hikes from major central banks. Traders expect the European ⁠Central Bank to hike rates by 25 basis points as early as next week, LSEG data showed.

“In our ​interpretation, this still falls into the ’insurance’ hike classification, but further tightening from there – which is widely priced in by markets – would instead imply that the ECB sees restrictive policy as necessary, a much bolder move unless data shows a core inflation uptrend,” ING analysts said in a note.

Overseas, the pan-European STOXX 600 was down 0.76 per cent in morning trading. Britain’s FTSE 100 dropped 0.9 per cent, Germany’s DAX gave back 1.09 per cent and France’s CAC 40 retreated 0.46 per cent.

In Asia, Japan’s Nikkei closed 0.15 per cent lower, while Hong Kong’s Hang Seng fell 0.93 per cent.

Oil prices rose as the resumption of ​fighting between the U.S. and Iran in the ‌Middle East renewed fears of supply disruptions from the world’s key crude-producing region.

Brent crude futures were up almost 2 per cent to US$92.27 a barrel, while West ⁠Texas Intermediate (WTI) ​crude gained 2.6 per cent to US$88.01.

Yesterday, U.S. President Donald Trump threatened ​further strikes against Iran following the first exchange of ‌direct attacks between the countries in a month on Sunday, raising tensions in a conflict that had recently shifted into an economic standoff.

“These bring the potential for Iranian retaliation back into the equation. That in turn raises the prospect of damage to energy infrastructure around the Gulf ‌and adds fresh ​uncertainty for shipping through ‌the Strait of Hormuz. Both of those risks are being reflected in the firmer ​tone in crude prices,” said Tim Waterer, chief market ⁠analyst at KCM.

In other commodities, spot gold was down 1.2 per cent to US$4,393.89 an ⁠ounce. U.S. gold futures fell 0.9 per cent to US$4,443.10.

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

The day range on the loonie was 72.05 US cents to 72.23 US cents in early trading. The Canadian dollar was up about 1.35 per cent against the greenback over the past month. It traded at $1.3874 per US$1.

The U.S. dollar index, which weighs the greenback against a group of currencies, gained 0.16 per cent to 99.59.

The euro slid 0.19 per cent to US$1.1595. The British pound declined 0.04 per cent to US$1.3543.

In bonds, the yield on the U.S. 10-year note was last up at 4.784 per cent.

Japan’s capital spending and manufacturing PMI

Euro zone CPI, manufacturing PMI and jobless rate

9:30 a.m. ET: Canada’s S&P Global Manufacturing PMI for August.

9:45 a.m. ET: U.S. S&P Global Manufacturing PMI for August.

10 a.m. ET: U.S. construction spending for July.

10 a.m. ET: U.S. ISM Manufacturing for August.

10 a.m. ET: U.S. Job Openings & Labor Turnover Survey for July.

Also: Canadian and U.S. auto sales for August.

With Reuters and The Canadian Press