If prices go up, Fed officials may be inclined to raise its benchmark rate, raising borrowing costs for businesses and consumers. That could lead to businesses to cut jobs, particularly in the high-growth tech sector, and force Americans to pull back on spending, which drives more than 70% of economic activity in the U.S.

Israel’s attack on Iran has catapulted their long-running conflict into what could become a wider, more dangerous regional war and potentially drive prices higher for both businesses and households

Rather, it is geopolitical factors—specifically, escalating tensions in the Middle East—that are unsettling markets and pushing prices higher.

A sustained rise in the price of crude oil, which jumped sharply after Israel attacked Iran, could hurt consumers and President Trump’s efforts to bring down energy costs.

U.S. ultra-low sulfur diesel futures hit the highest level since February, outpacing gains in oil and gasoline as analysts warned that diesel supply is the most exposed to the conflict in the Middle East.

Although the U.S. is a net oil exporter, higher oil prices could increase inflation and lower economic growth.

Market reactions to Israel’s attack on Iran weren’t all that surprising Friday – with one key exception. That aberration signals where traders’ real fears seem to lie. Stocks fell, as one would expect,

Oil prices settled slightly lower on Thursday as traders booked profits from a 4% rally in the prior session, driven by concerns that worsening tensions in the Middle East could cause supply disruptions.