A protester sets fires to close streets near Tahrir Square during a demonstration to protest against the Iranian missile strike, protesters said, in Baghdad, Iraq, Wednesday, Jan. 8, 2020. Iran struck back at the United States early Wednesday for killing a top Revolutionary Guard commander, firing a series of ballistic missiles at two military bases in Iraq that house American troops in a major escalation between the two longtime foes. Photo: Khalid Mohammed/AP

BENGALURU – US stock index futures fell early on Wednesday as investors scurried to safe-haven assets after Iran fired rockets at US-led forces in Iraq in response to the killing of a top Iranian commander, sparking fears of a wider war in the Middle East.

Iran fired more than a dozen ballistic missiles on at least two Iraqi facilities hosting US-led coalition personnel, as the burial of Qassem Soleimani, who was killed in a US drone attack on Friday, was concluding.

The retaliation shook global financial markets, with S&P futures .EScv1 tumbling as much as 1.7 percent and the benchmark US 10-year Treasury yield falling to a one-month low. Stock markets in Europe were also indicated lower.

Oil and gold prices surged by about 5 percent and 2 percent, respectively, before receding slightly as Iranian officials said that their country did not want a war and the strikes “concluded” its response to Soleimani’s killing.

President Donald Trump said in a tweet an assessment of casualties and damage was under way and that he would make a statement on Wednesday morning. A US official said the United States was not aware of any casualties from the strikes.

Some analysts said the attacks could provide investors an excuse to pull back from equities after improving global sentiment and an imminent US-China trade truce recently propelled the benchmark S&P 500 to record highs.

“We’ve had three months of asymmetric upward moves in the equity markets,” said Christopher Stanton, chief investment officer at San Diego-based Sunrise Capital.

“Things have become increasingly overbought. If you’re an investor, don’t you want to take it easy here and back off a bit?”

At 2:31am ET, Dow e-minis were down 88 points, or 0.31 percent. S&P 500 e-minis were down 3.5 points, or 0.11 percent and Nasdaq 100 e-minis were down 21.25 points, or 0.24 percent.

Investor attention this month will also be on the Federal Reserve’s first policy meeting for 2020, where it is widely expected to keep interest rates unchanged after three reductions last year.

Additional reporting by Ira Iosebashvili in New York.

Reuters