"A sustained $10 increase in oil prices is expected to increase inflation by 0.4% and lower GDP by 0.4%": Apollo Global Management 's ( APO -4.34%) chief economist Torston Slok says oil is fueling U.S. stagflation fears, adding to the effect expected from import tariffs.

Some calm is returning to Wall Street, and U.S. stocks are rising on Monday, while oil prices are giving back some of their initial spurts.

Although the U.S. is a net oil exporter, higher oil prices could increase inflation and lower economic growth.

That sent the yield on the 10-year Treasury up to 4.43% from 4.36% late Thursday. Higher yields can tug down on prices for stocks and other investments, while making it more expensive for U.S. companies and households to borrow money.

The Middle East is once again at the heart of global energy turbulence. In a dramatic escalation, Israel launched coordinated airstrikes on Iranian nuclear and energy infrastructure — rattling global oil markets and prompting a surge in crude prices not seen since Russia’s invasion of Ukraine.

A sustained rise in the price of crude oil, which jumped sharply after Israel attacked Iran, could hurt consumers and President Trump’s efforts to bring down energy costs.

The Federal Reserve is widely expected to hold interest rates steady next week, with investors focused on new central bank projections that will show how much weight policymakers are putting on recent soft data and how much risk they attach to unresolved trade and budget issues and an intensifying conflict in the Middle East.