A key concern for markets would center around the potential impact of the developments in the Middle East on oil prices and thus on inflation.

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Iran could retaliate against the U.S. strikes on its nuclear facilities by shutting down the Strait of Hormuz, a move that would likely cause oil and gas prices to surge.

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The Strait of Hormuz is one of the world's busiest shipping lanes, so any disruption would hit the energy markets hard.

Oil prices jumped to a five-month high in Asia on Monday in their first trading day after the US struck Iran's nuclear facilities on Sunday.

Iran’s parliament has voted to close the Strait of Hormuz, the vital shipping channel through which around 20% of the world’s daily oil flows.

Oil prices surged during late Sunday trading after the US launched strikes on three Iranian nuclear Saturday evening in a major escalation of the Iran-Israel conflict.

Oil prices fell 6% on Tuesday to settle at a two-week low, on expectations the ceasefire between Israel and Iran will reduce the risk of oil supply disruptions in the Middle East.