* Futures down: Dow 0.1%, S&P 500 0.2%, Nasdaq 0.4%

* Walmart ( WMT ) falls after maintaining annual targets

* Quantum stocks jump on report of $2 bln grants by Trump

administration

(Updates prices)

By Ragini Mathur and Utkarsh Hathi

May 21 (Reuters) - U.S. stock index futures turned lower

on Thursday as oil prices surged following a Reuters report that

Iran's Supreme ‌Leader Ayatollah Mojtaba Khamenei ordered the

country's near-weapons-grade uranium not be sent abroad,

dampening peace talk hopes.

Brent crude futures jumped 1.8% to $106.93 a barrel

after the report.

Crude prices had eased earlier in the session on prospects

of diplomatic progress as Pakistan stepped up efforts to

accelerate U.S.-Iran talks. But the Reuters report rekindled

concerns over Middle East tensions and the potential for

prolonged disruption around the Strait of Hormuz.

The yield on the benchmark U.S. 10-year Treasury note rose

to 4.607%, resuming its recent climb after snapping a three-day

run of gains on Wednesday. A lack of meaningful progress towards

reopening the Strait has added to inflation concerns, pushing up

yields and weighing on equities.

Investors also parsed a fresh batch of corporate earnings.

Walmart ( WMT ) dipped 1.6% in premarket trading after the

largest retailer globally maintained annual targets and forecast

second-quarter profit below estimates against a strained U.S.

economic backdrop.

Shares of Nvidia ( NVDA ), the world's most valuable

company, were flat after the AI heavyweight forecast

second-quarter revenue above Wall Street estimates and announced

an $80 billion share repurchase program.

Its stock has jumped almost 20% so far this year but the

pace of growth has slowed as investors believe Nvidia ( NVDA ) will face

tougher competition, not only from Big Tech but also chip rivals

including Intel ( INTC ) and Advanced Micro Devices ( AMD ).

"The market's attention is now focused on how long Nvidia ( NVDA )

can sustain this momentum," said Dan Coatsworth, head of markets

at AJ Bell. "Growing competition is a key factor weighing on

investors' minds, with Nvidia ( NVDA ) no longer in a one-horse race."

At 07:21 a.m. ET, Dow E-minis fell 65 points, or

0.13%, S&P 500 E-minis dropped 16.25 points, or 0.22%,

and Nasdaq 100 E-minis shed 105.5 points, or 0.36%.

Investors also monitored SpaceX after the company unveiled

its IPO filing on Wednesday, giving the market its first glimpse

into how much billionaire Elon Musk is spending on AI as he bets

on transforming the rocket maker into a broader AI-led business.

In economic data, weekly jobless claims and business

activity surveys are due later in the day and could offer fresh

clues about the health of the economy.

Intuit shares fell 14% after the software maker

lowered the annual revenue forecast for its tax-filing software,

TurboTax, and said it would cut 17% of its full-time workforce.

Meanwhile, IBM ( IBM ) climbed 6.3% after the Wall Street

Journal reported the Trump Administration was awarding $2

billion in grants to nine quantum-computing companies, of which

IBMwould receive $1 billion.

GlobalFoundries ( GFS ) was up 9.7%, D-Wave Quantum ( QBTS )

jumped 19.3%, Rigetti Computing ( RGTI ) gained 14.6% and

Infleqtion ( INFQ ) added 26%.