(Bloomberg) -- Financial markets got off to a volatile start on Monday, with US equity-index futures and crude oil getting whipsawed as the war in Iran entered a fourth week with no sign of de-escalation.

Crude oil swung sharply, jumping 1.9% initially, before reversing to fall nearly 1.8% to $110 a barrel. S&P 500 futures were similarly choppy, briefly gaining before settling down 0.1%. Australian shares fell 2% at the open and futures pointed to a weak start for equities across the region.

Australia’s 10-year government bond extended losses, with yields on the benchmark note rising 11 basis points on Monday.

Tensions in the Middle East showed no signs of easing with President Donald Trump issuing a 48-hour ultimatum to Tehran to reopen the Strait of Hormuz or face strikes on its power plants, a deadline that expires Monday evening in New York. Iran responded that any such attack would prompt it to shut the waterway indefinitely and target US and Israeli energy infrastructure across the region.

“Pulling back on this war is not Trump’s sole decision,” Matt Maley, the chief market strategist at Miller Tabak, said in an interview. “Uncertainty has been increasing for three weeks and the uncertainty took a big jump now. Even if people don’t sell, they are not going to be buying — and if there are no bids, it creates a vacuum.”

Global markets have been ravaged by the US-Iran war, which saw stocks and bonds sell off in tandem last week. US yields are perched at their highest in months after a third straight week of bond losses. Short-term notes led last week’s rout, with two-year Treasury yields climbing 18 basis points to 3.90%, following selloffs in European bond markets as investors positioned for higher rates.

The selloff in the US accelerated on Friday as traders started anticipating that the Federal Reserve may shift to hiking interest rates this year as oil prices threaten to deliver a fresh inflation shock. Markets are bracing for similar moves from central banks in Japan, Europe and the UK, even as the war also dampens the outlook for economic growth globally.

After markets closed on Friday, Trump indicated he was looking for a way to pull back from the war by saying on social media that he was considering winding down military efforts in Iran, claiming the US was “very close” to meeting its objectives. But his later threats to bomb power plants — and Iran’s vow to retaliate — showed little progress toward a ceasefire.

“It’s a soft start for risk, but perhaps surprisingly contained given the ultimatum hanging over the market,” said Chris Weston, the head of research at Pepperstone Group in Melbourne.