Global markets fell as fresh U.S. airstrikes ​on Iran pushed oil prices to five-week highs, ‌stoking inflation concerns and extending a global bond sell-off.

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

TSX futures followed sentiment lower ahead of the Bank of Canada’s rate decision later this morning. As Mark Rendell reports, the central bank is expected to hold rates steady at 2.25 per cent it wrestles with an escalating trade war that risks pushing up consumer prices while hammering economic growth.

In Canada, investors are getting results from Major Drilling Group International Inc.

On Wall Street, markets are watching earnings from Broadcom Inc., Hewlett Packard Enterprise Co., Snowflake Inc. and Netskope Inc.

“The recent increase in energy prices has put additional upward pressure on bond yields, which had already been on the rise on ​the back of some fiscal concerns,” said Kiran Ganesh, ‌multi-asset strategist at UBS Global Wealth Management.

Overseas, the pan-European STOXX 600 was down 0.57 per cent in morning trading. Britain’s FTSE 100 fell 0.56 per cent, Germany’s DAX dropped 0.77 per cent and France’s CAC 40 gave back 0.62 per cent.

In Asia, Japan’s Nikkei closed 2.85 per cent lower, while Hong Kong’s Hang Seng slipped 0.07 per cent.

​Oil prices extended gains after climbing to more ​than one-month highs earlier in the session ‌as traders weighed the risk of supply disruptions following overnight U.S. and Iranian strikes against signs that crude supplies continue to reach the market.

Brent crude futures rose 0.4 per cent ​to US$95.03 a barrel. West Texas Intermediate (WTI) crude futures advanced 0.25 per cent to $90.45.

“The market is facing ‌a binary risk,” said Saxo Bank head of commodity strategy Ole Hansen.

“An announcement that a deal has been reached, or that progress is being made, could send prices tumbling, while any escalation would further undermine the prospect of a peace deal. That’s why oil remains ‌highly volatile," ​with a potential US$5 move ‌in either direction on fresh developments.

In other commodities, spot gold eased 0.1 per cent to US$4,323.59 an ounce ​after hitting its lowest level since Aug. 7 earlier in the session. U.S. gold futures for December delivery dropped 0.6 per cent to US$4,370.40.

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

The day range on the loonie was 71.73 US cents to 72.04 US cents in early trading. The Canadian dollar was up about 0.54 per cent against the greenback over the past month. It traded at $1.3939 per US$1.

The U.S. dollar index, which weighs the greenback against a group of currencies, rose 0.14 per cent to 99.82.

The euro slid 0.19 per cent to US$1.1571. The British pound declined 0.24 per cent to US$1.3485.

In bonds, the yield on the U.S. 10-year note was last up at 4.819 per cent.

Japan’s consumer confidence

8:15 a.m. ET: U.S. ADP National Employment Report for August.

9:45 a.m. ET: Bank of Canada’s rate decision.

10 a.m. ET: U.S. factory orders for July.

2 p.m. ET: U.S. Beige Book is released.

With Reuters and The Canadian Press