Wall Street tumbled into the red on Wednesday, while the FTSE 100 (^FTSE) and European stocks reversed their early gains, as the latest reading on US producer prices pointed to accelerating inflation.

Negative sentiment also came amid a report that Iranian energy assets on the Persian Gulf coast have been hit by US and Israeli airstrikes.

Iran state media said gas facilities at the giant South Pars fields, which it operates alongside Qatar, were attacked, leading to the shut down of several petrochemical assets “in order to control and prevent the speed of fire”.

In response, Iran’s Revolutionary Guards threatened several energy facilities across Saudi Arabia, the UAE, and Qatar in retaliation for the attack on its energy sites, fuelling market concerns over oil and gas supplies from the region.

The news sent oil (BZ=F, CL=F) prices back up, which had dipped earlier in the day after it was revealed that crude exports from Iraq’s Kirkuk fields by pipeline to Turkey’s Ceyhan port have resumed, giving an alternative route to the strait of Hormuz. The Iraqi state news agency said Kirkuk resumed pumping oil via Turkey at a rate of 250,000 barrels.

Read more: Energy price surge derails expectations for Bank of England interest rate cuts

Elsewhere, US producer prices rose more than twice as fast as expected in February, according to data released Wednesday by the Bureau of Labor Statistics.

Prices rose 0.7% in February over the previous month, up from January’s 0.5% and more than double economists’ expectations for an increase of 0.3%.

Excluding the more volatile food and energy costs, producer prices advanced by 0.5% over the previous month, outpacing the 0.3% growth economists had predicted but below the previous month’s gain of 0.8%.

On a year-on-year basis, headline prices rose by 3.4%, above estimates of 3% and the previous month’s 2.9% year-on-year increase. Prices ex-food and energy gained 3.9% year-on-year, hotter than estimates of 3.7% and the previous month’s 3.6%.

Traders will also have their eyes on the Federal Reserve tonight, which is widely expected to leave US interest rates on hold.

London’s benchmark index (^FTSE) tumbled 1.1% by the end of the session as UK borrowing costs declined to their lowest in a week.

Germany’s DAX (^GDAXI) declined 1% and the CAC (^FCHI) in Paris headed 0.1% into the red.

The pan-European STOXX 600 (^STOXX) was down 0.8%.

The Dow Jones Industrial Average (^DJI) lost 0.8% by the European close following a second winning day in a row for Wall Street stocks. The S&P 500 (^GSPC) and tech-focused Nasdaq Composite (^IXIC) fell about 0.5% and 0.6%, respectively.

The pound was 0.2% down against the US dollar (GBPUSD=X) at 1.3334.