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Global instability is shaking investors after a bullish start to the year.

What happened: The United States killed a top Iranian military leader in an airstrike at Baghdad's airport on Friday morning local time. The attack, which was ordered by President Donald Trump, raises the specter of retaliation and further military escalation in a very sensitive region.

Traders respond: Brent crude futures, the global benchmark for oil prices, shot up 4% to above $69 per barrel. Stocks in Europe were lower in early trading, with Germany's DAX down 1.9% and Britain's FTSE 100 off 0.5%. US stock futures point lower, too, with the Dow set to tumble more than 300 points and the S&P 500 set to open down 1.3%.

Markets have been posting record highs recently, buoyed by a resilient US economy and consumer spending. The attack is a reminder, however, that positive performance doesn't last forever.

What happens next: Eurasia Group, a political risk consultancy, expects Iran to retaliate but thinks its response "will likely be limited to Iraq and fall short of large-scale conflict."

Its analysts predict that oil prices will likely hold around $70 per barrel, but could push up toward $80 "if the conflict spreads to the oil fields of southern Iraq or if Iranian harassment of commercial shipping intensifies."

Remember: The global environment was already supportive of oil prices. US shale production is slowing, Venezuelan production is suffering, and OPEC announced deeper supply cuts in December, Bernstein analyst Oswald Clint told me.

Clint already had a price target for Brent crude of $70 per barrel for 2020, above the industry consensus. Heightened tensions between the United States and Iran support that outlook, he said.

A recession is the top worry for CEOs in 2020

Economists aren't predicting a global or US recession in 2020. But top executives are still bracing themselves for the worst.

American CEOs say a recession is their top concern heading into next year, according to a new survey from the Conference Board. In 2019, cybersecurity was their top worry, while a recession was in third place.

Bart van Ark, the Conference Board's chief economist, said these concerns "reflect the slowing economy of the past year and the uncertainties about the outcome of the trade disputes." But he thinks the mood will improve as business leaders take in a slightly better outlook for the global economy and easing trade tensions.

"We anticipate that a drumbeat of negative sentiment — which can become a self-fulling prophecy — can be avoided, and that we will see more confidence about business prospects in 2020," he said.

However, with executives on edge, any bad news could reverberate and affect investment.

See here: Data released this week by the Federal Reserve Bank of Philadelphia shows that the economies of nine US states are expected to contract within six months. That's the highest number since the end of the Great Recession in 2009, according to Bloomberg.

Tesla is already cutting the prices of China-built cars

Just days after starting deliveries, Tesla is lowering the prices of cars it builds in China.

The electric car company on Friday slashed the starting price of its Shanghai-made Model 3 sedan to 323,800 Chinese yuan (about $46,400) from 355,800 yuan (about $51,000). With government subsidies, the cost could drop to as low as 299,050 yuan (about $42,900) — about 16% off the original sticker price, my CNN Business colleagues Jill Disis and Laura He report.

The takeaway: China is the world's largest car market, though sales have fallen for two consecutive years as its economy falters. Doing well there is a big part of Tesla's plans for growth.

The company has said it wants to eventually make 500,000 cars a year at its new plant in Shanghai. It just needs to make sure it can sell them at a profit.

Up next

The ISM Manufacturing Index for December arrives at 10 a.m. ET. That's followed by the Fed minutes from the central bank's December meeting at 2 p.m. ET.

This weekend: We're watching to see how rising tensions between the United States and Iran unfold, which could affect the outlook for oil prices and stocks.