NEW YORK (AP) — Oil prices are climbing, and stocks are slipping as violence in the Middle East injects more unease into financial markets worldwide. The S&P 500 was 0.4% lower ealy Monday in its first trading since Hamas launched a surprise attack over the weekend against Israel, which then formally declared war. The Dow fell 4 points and the Nasdaq composite was off 1%. The area under conflict is not home to major oil production, but fears that the fighting could spill into the politics around the crude market sent a barrel of U.S. oil up 3.6%. Stocks of oil and defense companies rose.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

Wall Street tumbled lower in premarket trading Monday as crude oil prices surged after the Israeli government declared war following deadly attacks by Hamas from the Gaza Strip.

Futures for the S&P 500 skidded 0.6% before the bell, while futures for the Dow Jones industrials fell 0.5%.

The bond market in the U.S. is closed Monday for the Columbus Day holiday, but the New York Stock Exchange and Nasdaq will be open.

Oil prices were up more than $3 a barrel. Conflict in the Middle East often pushes oil prices higher given the risk of disruptions to supplies.

“Disruptions or escalations in the region can have far-reaching implications for energy markets, global supply chains, and geopolitical dynamics,” Stephen Innes of SPI Asset Management said in a commentary.

The fighting has not yet had any discernible impact on oil output, but geopolitical escalations in the Middle East typically lead to a “buy-first-ask-questions-later” response, he said.

Oil prices had eased back from highs of the mid $90 range last month in recent days, falling sharply last week. Early Monday, U.S. benchmark crude oil was up $3.35 at $86.14 per barrel in electronic trading on the New York Mercantile Exchange. It picked up 48 cents on Friday.

Brent crude, the pricing basis for international trading, advanced $3.32 to $87.90 per barrel.

Geopolitical tensions also sent U.S. military contractors surging early Monday. Northrop Grumman and RTX each rose 3.6% while Lockheed Martin jumped 4.6%.

In equities markets, shares in travel and leisure companies such as airlines and cruise ships tumbled. American, United and Delta suspended service to Israel as the U.S. State Department issued travel advisories for the region citing potential for terrorism and civil unrest.

Major airlines were down between 2% and 3% before the bell, while cruise lines Carnival and Norwegian were off just less than 3%.

Tel Aviv's main stock benchmark was down 0.4%. It closed 6.5% lower Sunday, after the attacks. Early Monday, Israel’s Central Bank said it will sell up to $30 billion in foreign exchange to prop up the shekel, which fell to a near 8-year low. It also said it will provide up to $15 billion to support market liquidity.

The shekel was mostly unchanged Monday at 3.8596 shekels per dollar.

In times of war, the U.S. dollar is often sought as a safe haven, as is gold. The price of gold was up 1% early Monday at $1,863.40 per ounce.

At midday in Europe Germany's DAX, the CAC 40 in Paris lost 0.4% and London's FTSE 100 all tumbled 0.8%.

In Asian trading, Shanghai reopened after a weeklong holiday, falling 0.4% to 3,096.92. The Hang Seng in Hong Kong gained 0.2% to 17,486.48. Its market reopened for afternoon trading after staying closed in the morning due to typhoon warnings.

Australia's S&P/ASX 200 was up 0.2% at 6,970.20. India's Sensex slipped 0.7% and in Bangkok, the SET fell 0.6%.

Tokyo and several other Asian markets were closed for holidays on Monday.

The two-day toll from the fighting in the Middle East surpassed 1,100 dead and thousands wounded on both sides. Palestinian militant groups claimed to be holding more than 130 captives from the Israeli side. Israel's declaration of war raises the question if it would launch a ground assault into Gaza, which in past situations has resulted in heavy casualties.

U.S. Defense Secretary Lloyd Austin ordered the Ford carrier strike group to sail to the Eastern Mediterranean to be ready to assist Israel, in a move meant to help deter any regional expansion of the conflict.

On Friday, Wall Street rallied after investors studied the nuances of a surprisingly strong report on U.S. employment that initially caused stocks to tumble on fears that upward pressure on inflation will lead the Federal Reserve to keep interest rates high.

The S&P 500 rose 1.2%, the Dow jumped 0.9% and the Nasdaq composite flipped to a gain of 1.6%.

Reports this week on inflation at both the consumer and wholesale levels are the next big data points due before the Fed makes its next announcement on interest rates on Nov. 1.

A strong job market also carries some rewards for financial markets in the short term. It means the economy is still doing well despite high rates, which could support corporate profits.

This week will bring the unofficial start to earnings reporting season for the S&P 500, with Delta Air Lines, JPMorgan Chase and UnitedHealth Group among the big companies scheduled on the calendar.

In other currency trading, the dollar rose to 149.16 Japanese yen from 149.11 yen late Friday. The euro fell to $1.0528 from $1.0553.

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AP Writer Jon Gambrell in Jerusalem contributed.

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