Renewed fighting between the U.S. and Iran added yet another dose of uncertainty to the global economy.

Crude oil prices jumped and stock prices fell after President Trump declared an end to the fragile ceasefire in the Strait of Hormuz. The U.S. military attacked dozens of targets along the Iranian coastline overnight, in retaliation for what appeared to be Iranian attacks on vessels trying to transit the Strait.

The hostile action threatens to prolong volatility in global markets just weeks after investors had reacted with relief after Trump and Iran had agreed on a ceasefire.

Both the U.S. and international benchmarks for crude oil jumped about 7% on Wednesday, although they still remain well below their springtime peaks. Meanwhile, the Dow Jones Industrial Average tumbled more than 800 points or 1.5% after hitting a record high just two days earlier.

The resumption of attacks renews the prospect of inflationary pressure after a month of falling gasoline prices. The initial price spike was muted, however, suggesting that markets don’t expect a return to full-blown war. Retail gasoline prices in the U.S. rose less than a penny per gallon overnight, according to AAA, though they could climb higher in the coming days as higher crude oil costs are passed along.

Global markets have been volatile ever since the U.S. and Israel first attacked Iran in February — and the jump in bond yields seen overnight signals that investors expect renewed uncertainty.

All eyes are on the Federal Reserve

The ongoing tensions with Iran will also continue to add pressure on the Federal Reserve under new chair Kevin Warsh.

A market gauge — the CME tracking tool — suggests investors now see a better than one-in-three chance that the Fed will raise interest rates later this month. That’s up from about a one-in-four chance on Tuesday, before the ceasefire broke down

The central bank is closely monitoring higher energy prices, which have already pushed inflation well above its 2% target. The Trump administration is also preparing for a new round of global tariffs, which could put more upward pressure on import prices in the second half of the year.