S&P 500 Futures dropped 0.4% to 7,689.0 points, Nasdaq 100 Futures declined 0.7% to 29,294.75 points, while Dow Jones Futures shed 0.27% to 54,440.0 points

U.S. stock index futures fell on Sunday evening amid renewed hostilities in the Middle East, sending oil prices up sharply higher.

Markets were also on edge over a hawkish outlook for the central bank after remarks from Chair Kevin Warsh on Friday ramped up expectations for more interest rate hikes.

S&P 500 Futures dropped 0.4% to 7,689.0 points. Nasdaq 100 Futures declined 0.7% to 29,294.75 points, while Dow Jones Futures shed 0.27% to 54,440.0 points.

Futures fell after a negative session on stock market, with stocks broadly retreating after Warsh’s comments at the Jackson Hole economic symposium.

The U.S. over the weekend launched new strikes against Iran.

Tehran retaliated by attacking U.S. forces in Jordan, a Fox News reporter said on Sunday.

The strikes sent oil prices up 2% in early Monday trade, as markets fretted over continued supply disruptions in the Middle East.

Last week, the U.S. had unveiled stricter sanctions against Iran. Iran had balked at the measures, and had also flagged an agreement with Oman to reopen the Strait of Hormuz.

Warsh reiterated the central bank’s commitment to curbing inflation and bringing it to its 2% annual target, although he did not provide any clear cues on just how the central bank would achieve this.

Still, his comments were viewed as coming closer to acknowledging the need for interest rate hikes, with markets ramping up their bets on a rate hike before the year-end.

Treasury yields shot up on Friday, with technology and chipmaking stocks the worst hit by the trade. Rising oil prices, which could factor into higher inflation, added to anxiety over higher rates.

Markets are now pricing in a 55.9% chance the central bank hikes rates by 25 basis points during its September 16 meeting, according to CME Fedwatch.