Crude oil prices hit 3-1/2-year highs on Wednesday after President Donald Trump pulled the United States out of an international nuclear deal with Iran, while the dollar touched a new high for the year and world stocks held steady.

Trump’s move sparked fears of increased tension in the Middle East and uncertainty over global oil supplies.

Demand for safe-haven assets remained muted as the immediate market impact was seen as specific to oil supply, but investors remained mindful of the knock-on effects on inflation.

Gold prices retreated and bond yields rose. The U.S. 10-year Treasury once again breached the psychologically significant 3-percent level and hit a two-week high of 3.0140 percent, supported by expectations of higher interest rates.

“In an environment where the Fed, particularly, is already at its inflation target and people are closely watching the pace of the monetary tightening, something like this which could possibly nudge inflation a little bit higher is going to be quite interesting for the market,” UBS Wealth Management’s UK chief investment office deputy head, Caroline Simmons, said.

“That’s why you’re seeing the yields go up a little bit on the bonds,” she said.

The impact of Trump’s decision was mostly limited to oil markets and energy-related stocks. West Texas Intermediate crude futures hit their highest level since November 2014 at $71.17 per barrel, last up 2.7 percent.

“There is still an interim period before sanctions kick in. And other signatories and Iran want to keep the deal going so there is a period where things could be hammered out,” ING rates strategist Benjamin Schroeder said.

The rise in Treasury yields helped fuel the dollar’s rally, with the greenback hitting a new 2018 high before giving up gains.