Wall Street followed the FTSE 100 (^FTSE) and European stocks lower on Thursday as Israel and Iran launched fresh attacks. Iran said the US would “bitterly regret” torpedoing an Iranian warship in the Indian Ocean, while Israel said it had begun a “large-scale” attack on Tehran.

Global markets have been thrown into turmoil this week after the US and Israel began strikes against Iran over the weekend. Thursday marks the sixth day of violence with no immediate signs of abatement.

Tehran also effectively shut down the Strait of Hormuz, through which a fifth of the world’s crude and considerable liquefied natural gas (LNG) supplies travel, sending oil prices soaring.

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Brent (BZ=F) has climbed toward $84 a barrel, at the time of writing, after jumping 12% over the first three days of the week, while West Texas Intermediate (CL=F) sits around $77.

The cost of government borrowing has also risen again on Thursday, following the latest spike in the price of oil, amid worries that continued conflict in the Middle East will deliver an inflation shock.

Bond yields, the return governments promise to buyers of their debt, rose across Europe, with eurozone government bonds set for their ⁠steepest weekly sell-off in a year. Germany’s benchmark 10-year bund was up four basis points to 2.79%.

Meanwhile, the yield on 10-year UK gilts rose by seven basis points to more than 4.5%, mirroring sharp rises seen earlier this week.

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It comes as three European Central Bank (ECB) policymakers warned on Thursday that eurozone inflation would probably rise if the war in Iran continued and drew in more countries.

The ECB’s vice president Luis de Guindos, and the central bank governors of Germany and Finland, all said it was too early to draw conclusions but warned that a prolonged, wider war may push up inflation, both present and expected.

De Guindos told an event in Brussels: “The baseline (is) that this is going to be short-lived. If it is longer, then there is a risk that inflation expectations will change.”

Elsewhere, traders have their eyes on a highly-anticipated monthly jobs report on Friday, offering investors another read on the health of the US labour market.

London’s benchmark index (^FTSE) was 0.5% down in afternoon trade.

Germany’s DAX (^GDAXI) also dipped 0.5% and the CAC (^FCHI) in Paris headed 0.5% into the red.

The pan-European STOXX 600 (^STOXX) was 0.3% lower.

The Dow Jones Industrial Average (^DJI) led the way down with a drop of 0.6%, while the S&P 500 (^GSPC) and the tech-exposed Nasdaq Composite (^IXIC) both lost roughly 0.3%.

The pound was 0.3% down against the US dollar (GBPUSD=X) at 1.3338