World stocks sink on Wednesday and Wall Street showed a weaker activity after Iran’s move. Earlier sharp market moves faded as an immediate military escalation in the region was feared.

Investors are waiting now for a statement from US President Donald Trump but his earlier tweet — “All is well!” and “So far, so good!” — has led to hopes that the United States will stop short of strong retaliation.

Oil had surged above $70 a barrel, while gold held at new seven-year highs. S&P500 futures, down almost 2% at one point, to trade around flat by 1100 GMT.

The Japanese yen, which surged almost 1% to three-month highs after the attacks, also eased back to trade flat on the day at 108.450. Brent crude futures slipped off highs to below $69 a barrel. “The live situation was optically quite dramatic but the important thing to focus on is the no-human-casualty dimension, which gives ample space to de-escalate the situation,” said Salman Ahmed, chief investment strategist at Lombard Odier Investment Managers.

“The Trump factor is the random factor but what’s visible is that no one wants war and that’s what markets are focusing on.” A pan-European equity index slipped 0.2% but after opening 0.5% lower. MSCI’s index of global equities pulled back 0.2% but remained less than 1% off recent record highs.

Earlier, Chinese shares closed more than 1% lower, Japan’s Nikkei lost 1.6% and an MSCI ex-Japan Asian benchmark fell 0.6%.

“We are looking out for whether the US is going to retaliate, so it’s going to be a big wait-and-see mode until we hear from Trump,” Ashley Glover at CMC Markets in Sydney.

“We are seeing that ‘buy the dip’ mentality creeping in as big long-term investors like to buy into these weaknesses.” Bond-buying also faded, with yields on benchmark 10-year US Treasury notes at 1.81%, down one basis point on the day but well off session lows around 1.705%. The 10-year German government bond yield was unchanged on the day at -0.284% after earlier falling to -0.299%.

US 10-year Treasury futures had earlier peaked at their highest level since November, and were last up 0.18%.

On currency markets, the attacks had sent the yen spiralling to three-month highs beyond 107.7 per dollar but gave up all those gains to trade flat at 108.4. Another safe-haven currency, the Swiss franc, also gave up knee-jerk gains.

“If the market was really worried that the end of the world was nigh, dollar/yen would have collapsed, and that’s clearly not been the case,” said Stuart Oakley, global head of flow FX at Nomura in Singapore.

The euro was 0.2 weaker, buying $1.1129 and the dollar index was up 0.1% at 97.10. The buying of gold and oil also eased as the trading session wore on - Brent crude futures which had shot to $70 per dollar, were last up 0.5% at $68.1 per barrel. Gold, which earlier brushed through $1,600 an ounce, eased to $1,582. Lombard Odier’s Ahmed said he had not reduced equity holdings overall but had increased exposure to energy stocks.

“We adopted a long oil hedge to portfolio and we are maintaining that... Oil may be one market that’s not reflecting geopolitical risks.”

The pound erased early gains on Wednesday as investors refocused their attention towards Brexit talks and a European Central Bank policymaker said Britain could crash out of the European Union without a deal in place by the end of 2020.

Sterling’s weakness came despite riskier assets recouping earlier.  Though the Japanese yen initially gained and global stocks tumbled after the attacks, market fears faded on some hopes the raid would not lead to an immediate military escalation, pushing risky assets including the pound higher.

But those gains proved to be short-lived as investors resumed selling the pound near $1.32 levels against the dollar.

“If the US-Iran situation calms, as it looks it might, then focus will return to Boris Johnson’s meeting with the European policymakers and the tone of any comments that will follow,” said John Marley, a senior FX consultant at FX risk management specialist, SmartCurrencyBusiness.

Britain is due to leave the bloc on Jan. 31 and the sides will then have until the end of the year to negotiate a new trade relationship - a short period given the complexity of the discussions.

A hard Brexit at the end of 2020 remains a possibility and could cut deep into foreign trade, much as if Britain were to leave the EU without a deal, European Central Bank policymaker Klaas Knot said on Wednesday.

British Prime Minister Boris Johnson will tell European Commission Chief Ursula von der Leyen on Wednesday that Britain will not extend the transition period beyond December and is not seeking a new relationship based on alignment with existing rules.

“With Johnson reluctant to pursue any more delays, there is a clear risk of the process resulting in a no-deal Brexit at the end of the year, the threat of which is likely to limit any upside in the pound,” said Phil McHugh, Chief Market Analyst at Currencies Direct.

The British pound which was up as much as 0.3% earlier, erased most of its gains and traded flat at $1.3129, moving further away from a two-week high of $1.3284 hit on Dec. 17. Against the euro, the pound stepped back from the day’s highs to trade 0.2% stronger at 84.74 pence.

Agencies