SINGAPORE (REUTERS)

Stocks were on tenterhooks and oil prices rose in choppy trade on Tuesday as US President Donald Trump's postponement of the bombing of Iran's ​power grid proved no panacea for investors worried about the ramifications of the Middle East war.

US Treasury yields pushed higher and the dollar regained lost ground, in a retracement of the relief rally that swept markets overnight after Trump added five days to his Saturday ultimatum for Iran to ⁠reopen the Strait of Hormuz within 48 hours, citing "productive" talks with Tehran.

Much uncertainty remained as the world continues to grapple with ​the energy shock.

Markets in Europe were set for a dour start, with EUROSTOXX 50 futures down 1% while FTSE futures lost 0.47%. S&P 500 futures ‌fell 0.56% and Nasdaq futures shed 6%.

Asia shares meanwhile edged higher in a catch-up rally to global ‌counterparts. MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.3%, while Tokyo's Nikkei advanced 0.95%. Hong Kong's Hang Seng Index added 1.6%.

With the war raging and shipments of about one-fifth of the world's oil and liquefied natural gas through the Strait of Hormuz still curtailed, oil prices resumed their climb on Tuesday.

Brent crude futures were up 3.6% to $103.58 a barrel, reversing some of their 10% slide from the previous session, while US crude rose 4.12% to $91.76 per barrel.

"The war has resulted in lasting ‌damage to infrastructure, so even if it's over soon energy ​prices may well remain higher - and bond and equity prices lower - for longer than they otherwise would have been," said Thomas Mathews, head of markets for Asia-Pacific at Capital Economics.

US Treasury yields rose on Tuesday after a sharp fall overnight, as little clarity over an end to the conflict left traders ​pricing in a more hawkish global interest rate outlook.

The two-year ‌yield ⁠jumped 7 basis points ‌to 3.9015% in Asia, while the benchmark 10-year yield was up more than ‌4 bps to 4.3797%.

The inflationary pulse from energy has seen investors abandon hope for further monetary easing globally and swing to pricing in rate hikes across most developed nations.

The US ⁠Federal Reserve is seen leaving rates on hold this year, with futures pointing to a small chance of a hike, ​while the Bank of England and European Central Bank are widely expected to raise rates.

The US dollar meanwhile rebounded from its fall on Monday, pushing the euro down 0.24% to $1.1587, while sterling slid 0.5% to $1.3389. The risk-sensitive Australian ​and New Zealand dollars fell more than 0.5% each.

In precious metals, spot gold was down 1.3% at $4,350.51 ​an ounce, pressured by expectations of higher-for-longer US rates.