Financial markets may be in for a "knee-jerk" selloff if the U.S. military attacks Iran, with economists warning that a dramatic rise in oil prices could damage a global economy already strained by President Donald Trump's tariffs.

Stocks rose and oil prices retreated on Monday as investors shrugged off the continuation of hostilities between Israel and Iran over the weekend.

The S&P 500 typically fully recovers within a few weeks of a major geopolitical shock such as an invasion or attack, Deutsche Bank Research found.