Financial markets are set to reopen Monday with investors squarely focused on escalating geopolitical tensions as Israel and Iran continue to bombard each other with no sign of a pause.

Rising tensions over Iran's nuclear program have escalated amid diplomatic breakdowns, military preparations, and threats of conflict across the Middle East.

The opening of a new front in the conflict between Israel and Iran has brought geopolitical risk straight back into the foreign exchange calculus. After the Israeli strikes Friday morning, the dollar witnessed an element of the “flight-to-safety” characteristic traditionally associated with military escalation but as ING points out in its daily research note,

Bitcoin's decline today is influenced by US-China trade deal outcomes and geopolitical tensions involving Israel and Iran. The potential for future Federal Reserve rate cuts is increasing despite a slight decline in May's headline inflation figures.

Israel's Prime Minister Benjamin Netanyahu says his country will strike "every site and every target of the ayatollah regime" in Iran.

Israel's latest action pits traditional Republican support for Israel — and antipathy toward Iran — against the MAGA base's fear that the U.S. will be drawn into a new foreign war.

Keep an eye out for signs of labor-market weakness, as well as the risk that rising oil prices could put more upward pressure on inflation.

Israel launched strikes across Iran on Friday morning, targeting nuclear facilities and killing top military commanders in a major escalation against its chief adversary that risks sparking a broad war in the Middle East.