As traders increasingly anticipate that the conflict between the two arch adversaries will remain contained, S&P 500 futures rose 0.5%, pointing to a recovery after the US benchmark shed more than 1% on Friday. European and Asian stocks also gained. Treasuries declined for a second straight day amid concerns that higher oil prices could fuel inflation, with the 10-year yield rising five basis points to 4.44%.

Brent crude dropped 0.4% after initially soaring as much as 5.5% following a weekend of attacks. Gold dropped 0.5% from Friday’s all-time high.

The hostilities between Israel and Iran disrupted the momentum in markets, which had seen the S&P 500 rebound to within reach of its all-time high following April’s tariff-driven selloff. After traders initially adopted a wait-and-see approach to assess potential scenarios for how the conflict might unfold, markets engaged in dip-buying on Monday, anticipating that the conflict is unlikely to draw in more parties.

“The situation in the Middle East is not making the market shake, and it’s likely it will stay that way as long as there is no major escalation,” said Enguerrand Artaz, a fund manager at La Financière de l’Echiquier. “Markets are riding strong momentum. The mood overall is still very much about buying the dip.”

Later this week, the Federal Reserve and the Bank of Japan are among a raft of central banks set to announce interest rate decisions. Leaders of the Group of Seven nations are also meeting.

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 rose 0.2% as of 9:25 a.m. London time

• S&P 500 futures rose 0.5%

• Nasdaq 100 futures rose 0.6%

• Futures on the Dow Jones Industrial Average rose 0.4%

• The MSCI Asia Pacific Index rose 0.7%

• The MSCI Emerging Markets Index rose 0.7%

Currencies

• The Bloomberg Dollar Spot Index fell 0.1%

• The euro rose 0.3% to $1.1578

• The Japanese yen fell 0.2% to 144.29 per dollar

• The offshore yuan rose 0.1% to 7.1815 per dollar

• The British pound was little changed at $1.3583

Cryptocurrencies

• Bitcoin rose 2.2% to $107,019.01

• Ether rose 4.9% to $2,626.14