Oil prices climbed Friday after US and UK forces launched strikes against Iran-backed Huthi rebels, while global stocks were mixed following the kickoff of corporate earnings season.

Crude prices spiked more than four percent before ebbing somewhat after the allies launched deadly strikes following weeks of disruptive rebel attacks on Red Sea shipping.

“The fear in the oil market is that the region is on an unpredictable escalating path, where at some point down the road, supply of oil will indeed in the end be lost,” noted Bjarne Schieldrop, chief commodities analyst at SEB bank.

He noted that if the US-UK attacks were unsuccessful in destroying Huthi weapons, and oil tankers need to go around Africa, then up to 80 million barrels will be locked in transit – sending prices up as much as $5-10 per barrel.

The Huthis have carried out a growing number of strikes on vessels in the Red Sea, a key international shipping route, since the Gaza war erupted in October.

The attacks have affected trade flows at a time when supply strains are putting upward pressure on inflation globally.

In Friday trade, the Dow dipped while the S&P 500 edged higher as investors digested corporate earnings and a surprise drop in wholesale inflation.

Leading banks were mostly lower following a deluge of quarterly results, while airlines were hammered after Delta’s forecast disappointed investors.

“The market is optimistic as it can be about (interest) rate cuts,” said Steve Sosnick of Interactive Brokers, adding that investors want to see solid earnings.

Tokyo and European stock markets ended the week with strong gains.

The luxury sector was in focus after British fashion brand Burberry posted a profit warning, sending its share price sliding more than nine percent at one stage in London.

Investors are keenly waiting for a drop in interest rates, which central banks hiked in 2022 and 2023 in a bid to cool decades-high inflation.