Global markets showed signs of stability and oil prices declined as traders wagered tensions in the Middle East won’t escalate after Iran’s attack on Israel over the weekend. European stocks and US equity index futures gained.

Oil dropped on speculation that the conflict would remain contained after Iran said “the matter can be deemed concluded,” and President Joe Biden reportedly told Israeli Prime Minister Benjamin Netanyahu that the US won’t support an Israeli counterattack. Treasuries edged lower after yields slipped in the previous session.

“Market participants are certainly not giving up hope that the past weekend’s events were just a one-off occurrence, while holding their breath for what could happen next,” said Hebe Chen, an analyst at IG Markets.

With investors already rattled by sticky inflation and the prospect of higher-for-longer interest rates, the escalation in the Middle East had injected fresh volatility into markets. Many analysts predict oil could surpass $100 a barrel if the conflict widens and forecast a flight to Treasuries, gold and the dollar, along with further stock-market losses.

For now, attention will return to Wall Street’s earnings season, which kicked off with disappointing numbers for big banks on Friday and continues today with reports from Goldman Sachs, Schwab and M&T Bank.

There’s also a raft of economic data due this week, including Chinese growth data and Japan, Eurozone and UK inflation readings. The International Monetary Fund and World Bank spring meetings will be held in Washington.

Separately, aluminum and nickel surged following new US and UK sanctions that banned deliveries of any Russian supplies after midnight on Friday. Gold also gained.

Shares in Asia slipped, tracking Friday’s drop in US stocks, on escalating geopolitical risks, bank earnings and the prospect of the Federal Reserve keeping interest rates higher for longer.