U.S. stocks retreated from their records Tuesday after Iran fired missiles into Israel, a sharp escalation of tensions in the Middle East that investors fear could lead to disruptions in the flow of oil.

The S&P 500 pulled 0.9% lower, and the Dow Jones industrial average lost 173 points, or 0.4%, after both had set all-time highs the day before. The Nasdaq composite dropped 1.5% after paring a bigger loss from earlier in the day, like other indexes.

Oil prices jumped amid speculation about how Israel and the United States may respond to Iran’s move.

While Israel is not a major producer of oil, Iran is, and the potential for a wider conflict could affect other, neighboring producers of crude. The price for a barrel of benchmark U.S. crude rose 2.4% to settle at $69.83. Brent crude, the international standard, rallied 2.6% to $73.56 per barrel.

That in turn sent shares of oil-and-gas producers to some of the stock market’s biggest gains. ConocoPhillips rose 3.9%, and Exxon Mobil climbed 2.3%.

Shares of defense contractors also rallied. Northrop Grumman rose 3%, and RTX added 2.7%. RTX partners with Israeli company Rafael Advanced Defense Systems to make the “Iron Dome” air defense system that Israel’s government uses.

The majority of U.S. stocks, though, sank. The two biggest stocks in the market, Apple and Microsoft, both fell at least 2.2%, while the smallest U.S. stocks that make up the Russell 2000 index dropped 1.5%.

All told, the S&P 500 fell 53.73 points to 5,708.75. The Dow dropped 173.18 to 42,156.97, and the Nasdaq composite lost 278.81 to 17,910.36.

The all-time high that the S&P 500 set on Monday was its 43rd of the year so far.

A discouraging report arrived Tuesday, showing U.S. manufacturing weakened by more in September than economists expected.

A separate report was potentially more encouraging. It showed U.S. employers were advertising more than 8 million job openings at the end of August.

In the bond market, the yield on the 10-year Treasury fell to 3.73% from 3.79% late Monday. Yields fell after worries about the Middle East drove investors into Treasurys, gold and other investments seen as safer.

— Associated Press