Stocks fell back from record highs on Thursday.

Investors were spooked by a fresh U.S. military strike on Iran and Kuwaiti reports of a missile attack.

The update hurt market confidence in a peace deal many see as key to easing global inflation risks.

Oil rose as much as 4% and bond prices fell due to the escalation.

U.S. President Donald Trump had earlier dismissed an Iranian report of a deal to resume traffic through the Strait of Hormuz.

The U.S. military said it had carried out new strikes targeting an Iranian drone operation.

While Tehran said it had attacked a U.S. airbase in Kuwait.

Brent crude was up 2.5% at just over $96 a barrel with transits through the strait at a low number.

The price has fallen back from four-year highs above $126 in late April.

But it's still a third above pre-war levels and 50% higher than a year ago.

Yields on 10-year Treasury notes were up 1.7 basis points at 4.5%.

That's as sustained high oil prices kept upward pressure on inflation expectations.

The developments also cooled this week's tech-led rally in stock markets that had pushed global indexes to new record highs.

Europe's STOXX 600 was down 0.6% in morning trading, just below February's all-time peak.

While U.S. stock futures were also slightly down.

Posted by: AAngeles/NET25 News