TOKYO (AP) — Global shares retreated Thursday as worries persisted about conflict in the Middle East.

On the seventh day of a conflict that began with a surprise wave of Israeli airstrikes targeting military sites, senior officers and nuclear scientists, Iranian state media reported that Iran’s foreign minister planned to meet with his European counterparts in Geneva.

Meanwhile, Israel carried out strikes on Iran’s Arak heavy water reactor, in its latest attack on Iran’s sprawling nuclear program.

The escalating warfare has shaken financial markets.

France’s CAC 40 slipped 0.8% in early trading to 7,593.06. In Germany, the DAX fell 0.9% to 23,141.82. Britain’s FTSE 100 lost 0.5% to 8,797.24. The futures for the S&P 500 and the Dow Jones Industrial Average were 0.4% lower.

The Federal Reserve opted Wednesday to keep its key interest rate unchanged, while its policymakers signaled they still expect to cut rates twice this year. They project that President Donald Trump’s higher import duties will fuel inflation. They also expect growth to slow and unemployment to edge higher.

The Bank of England likewise was expected to keep its key interest rate unchanged at 4.25% at its meeting Thursday, after cutting it twice this year.

Switzerland’s central bank cut its target interest rate by a quarter of a percentage point to zero on Thursday, saying that inflationary pressures have eased. It is among many central banks opting to go ahead and ease the cost of borrowing as uncertainty over Trump’s tariffs and geopolitical crises threaten global growth.

In Asian trading, Japan’s benchmark Nikkei 225 shed 1.0% to finish at 38,488.34. Shares in Japan’s Nippon Steel Corp. jumped 2.3% after it announced that its acquisition of U.S. Steel, which met U.S. government opposition for more than a year, was finally completed.

Hong Kong’s Hang Seng dropped 2.0% to 23,237.74 on heavy selling of tech-related shares, while the Shanghai Composite lost 0.8% to 3,362.11.

Australia’s S&P/ASX 200 was little changed at 8,523.70 and in South Korea, the Kospi rose 0.2% to 2,977.74.

U.S. financial markets will be closed Thursday for the Juneteenth holiday.

So far, U.S. inflation has remained relatively tame, and it’s near the Fed’s target of 2%. But economists have been warning it may take months to feel the effects of tariffs. And inflation has been feeling upward pressure recently from a spurt in oil prices because of Israel’s fighting with Iran.

Fed officials are waiting to see how big Trump’s tariffs will ultimately be, what they will affect and whether they will drive a one-time increase to inflation or something more dangerous. There is also still deep uncertainty about how much tariffs will grind down on the economy’s growth.

“Because the economy is still solid, we can take the time to actually see what’s going to happen,” said Fed Chair Jerome Powell.

“We’ll make smarter and better decisions if we just wait a couple months or however long it takes to get a sense of really what is going to be the passthrough of inflation and what are going to be the effects on spending and hiring and all those things,” he said.

A report released Wednesday said fewer workers applied for unemployment benefits last week, possibly indicating fewer layoffs. But another said homebuilders broke ground on fewer homes last month than economists expected. That suggests higher mortgage rates may be casting a chill on the industry.

In other dealings early Thursday, benchmark U.S. crude rose 13 cents to $73.63. Brent crude, the international standard, advanced 7 cents to $76.77 a barrel.

Oil prices have been yo-yoing as fears rise and ebb that the conflict between Israel and Iran could disrupt the global flow of crude. Iran is a major producer of oil and also sits on the narrow Strait of Hormuz, through which much of the world’s crude passes.

In currency trading, the U.S. dollar rose to 145.46 Japanese yen from 145.13 yen. The euro cost $1.1476, down from $1.1484.