Global markets were mixed in cautious trading amid concerns the Middle East conflict could bring a spike in inflation and the risk of recession to much of the globe.

Wall Street futures were in positive territory after major U.S. markets closed sharply lower on Friday.

TSX futures followed sentiment higher as commodity prices climbed.

“Oil is the lightning rod right now,” said Eren Osman, managing director of wealth management at Arbuthnot Latham, adding a reopening of the Strait of Hormuz was the key to calming world markets.

“The biggest challenge for us as investors today is that you’ve got one of the widest ranges of potential outcomes,” he said, adding ‌he did not ​expect a prolonged conflict as he believed U.S. President Donald Trump ‌had a “pain threshold” for market losses.

Overseas, the pan-European STOXX 600 was up 0.15 per cent in morning trading. Britain’s FTSE 100 rose 0.62 per cent, Germany’s DAX slipped 0.17 per cent and France’s CAC 40 was little changed.

In Asia, Japan’s Nikkei closed 2.79 per cent lower, while Hong Kong’s Hang Seng declined 0.81 per cent to a one-year low.

Oil prices extended gains after Yemeni Houthis launched their ‌first attacks on Israel over the weekend, widening the U.S.-Israel war with Iran in the Middle East.

Brent crude futures advanced 2.8 per cent to US$115.70 a barrel. West Texas ⁠Intermediate (crude) was ​at US$101.40 a barrel, up 1.8 per cent.

“The market has all but discounted the prospect of a negotiated end to the war, Trump’s claims of ongoing ‘direct and indirect’ talks with Iran notwithstanding, and is bracing for a sharp escalation in military hostilities, which ​is a bullish signal for crude, with huge uncertainties on ‌the timing and nature of the outcome,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.

In other commodities, spot gold rose 0.8 per cent to US$4,529.58 an ounce. U.S. gold futures for April delivery gained 0.8 per cent to US$4,558.30.

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

The day range on the loonie was 71.83 US cents to 72.11 US cents in early trading. The Canadian dollar was down about 1.7 per cent against the greenback over the past month.

The U.S. dollar index, which weighs the greenback against a group of currencies, rose 0.08 per cent to 100.23.

The euro slid 0.1 per cent to US$1.1497. The British pound fell 0.14 per cent to US$1.3242.

In bonds, the yield on the U.S. 10-year note was last down at 4.399 per cent.

Euro area economic and consumer confidence

Germany CPI and retail sales.

10:30 a.m. ET: Federal Reserve Chair Jerome Powell participates in a moderated discussion at Harvard University

With Reuters and The Canadian Press