Stock futures lost ground Tuesday morning, while oil prices surged, as investors monitored developments in the escalating conflict between Israel and Iran.

Oil prices leaped, and stocks slumped on worries that escalating violence following Israel’s attack on Iranian nuclear and military targets could damage the flow of crude around the world, along with the global economy.

Oil prices have risen in response to the Israel-Iran war, bringing them nearly back to the levels where they traded before the Liberation Day tariffs were announced on April 2. Oil stocks are trailing well behind.

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By Wayne Cole SYDNEY (Reuters) -Asian markets kept their nerve on Monday and oil prices climbed anew as the conflict between Israel and Iran showed no sign of cooling, adding geopolitical uncertainty to the world's economic troubles in a week packed with central bank meetings.

US stocks closed higher as Iran aims to deescalate the clash with Israel. Oil prices eased. Fed meets on rates this week. No one expects a rate cut.

Relative calm returned to global markets, with stocks climbing and oil sinking alongside gold as fears subsided that Israel’s war against Iran would escalate into a wider conflict. News reports that Tehran wants to restart talks over its nuclear program also fueled risk-on sentiment.