By DAVID McHUGH and JIANG JUNZHE, Associated Press

FRANKFURT, Germany (AP) — Oil surged, stocks fell and investors sought safety in the U.S. dollar and government bonds Friday after Israel struck Iranian nuclear and military targets in an attack that raised the risk of war between the two countries and broader instability in the Middle East.

Futures for the S&P 500 fell 0.9% before the opening bell, while futures for the Dow Jones Industrial Average were down 1%. Nasdaq futures slid 1.1%.

U.S. benchmark crude oil rose by $4.73, or 6.9%, to $72.77 per barrel, its biggest gain since the early days of Russia’s attack on Ukraine more than three years ago. Brent crude, the international standard, climbed $4.58 to $73.94 per barrel, also the largest single-day jump since the Russian invasion.

Oil prices are likely to rise in the short term but the key question is whether exports are affected, said Richard Joswick, head of near-term oil at S&P Global Commodity Insights. “When Iran and Israel exchanged attacks previously, prices spiked initially but fell once it became clear that the situation was not escalating and there was no impact on oil supply,” he wrote in an emailed analysis.

“Oil price risk premiums could rise sharply if Iran conducts broader retaliatory attacks, especially if on targets other than in Israel,” Joswick said.

China is the only customer for Iranian oil but could seek alternative supplies from Middle Eastern exporters and Russia, he said.

Iran’s oil trade is restricted by Western sanctions and import bans, and Israel exports only small amounts of oil and oil products.

Boeing shares are down 1% after falling nearly 5% Thursday when one of the aerospace giant’s planes crashed in India, killing all but one of the 242 people on board as well as several on the ground. The plane operated by Air India was the first fatal crash of a Boeing 787 Dreamliner since it went into service in 2009.

The cause of the crash is unknown.

GE Aerospace, which makes engines for Boeing, is down close to 2% after it announced it was postponing next week’s investor day in light of the tragic crash.

In Europe at midday, Germany’s DAX dropped 1.3% and the CAC 40 in Paris gave up 0.9%. Britain’s FTSE 100 slipped 0.2%.

The yield on the 10-year Treasury fell to 4.35% from 4.41% late Wednesday and from roughly 4.80% early this year.

In currency trading early Friday, the U.S. dollar rose to 144.12 yen, while the euro eased to $1.1511. The yield on U.S. 10-year Treasurys fell to 4.35%. Bond yields and prices move in opposite directions.

Treasurys and the dollar often rise when investors feel less inclined to take risks.

Coming later Friday is the University of Michigan’s consumer sentiment report.

Next week brings the Federal Reserve’s two-day policy meeting where it will make a decision on its benchmark interest rate. The nearly unanimous expectation on Wall Street is that the U.S. central bank will stand pat again.

The Fed has been hesitant to lower interest rates, and it’s been on hold this year after cutting at the end of last year, because it’s waiting to see how much President Donald Trump’s tariffs will hurt the economy and raise inflation.

In Asia, Tokyo’s Nikkei 225 fell 0.9% to 37,834.25 while the Kospi in Seoul edged 0.9% lower to 2,894.62. Hong Kong’s Hang Seng retreated 0.6% to 23,892.56 and the Shanghai Composite Index lost 0.8% to 3,377.00. Australia’s S&P/ASX 200 drifted 0.2% lower to 8,547.40.

“An Israeli attack on Iran poses a top ten of our global risk, but Asian markets are expected to recover quickly as they have relatively limited exposure to the conflict and growing ties to unaffected Saudi Arabia and the UAE,” said Xu Tiachen of The Economist Intelligence.

AP Business Writer Matt Ott contributed. Jiang Junzhe reported from Hong Kong.