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Netflix ( NFLX ) falls after dour Q2 forecast

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Paramount up on likely Sony Pictures, Apollo buyout bid

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Futures down: Dow 0.33%, S&P 0.46%, Nasdaq 0.71%

(Updated at 6:55 a.m. ET/1055 GMT)

By Shashwat Chauhan and Shristi Achar A

April 19 (Reuters) - U.S. stock index futures fell on

Friday as investors turned risk-averse following reports of an

escalation in the Middle East conflict, while Netflix ( NFLX ) dropped

after the company forecast current-quarter revenue below

estimates.

Israel launched an attack on Iranian soil on Friday, sources

said, in the latest tit-for-tat exchange between the two arch

foes, whose decades of shadow war broke out into the open and

threatened to drag the region deeper into conflict.

The CBOE Volatility index, also known as Wall

Street's "fear gauge", was up 1.42 points at 19.42, its highest

level in more than five months.

"One mistake that causes casualties or hits an

unexpected target could trigger an escalation in reprisals and a

deeper, more dangerous situation in the Middle East," Kathleen

Brooks, research director at XTB, said in a note.

"This is why volatility is likely to stick around,

especially as it comes at a delicate time for financial markets

as they recalibrate expectations for interest rate cuts."

On the earnings front, Netflix ( NFLX ) slumped 6.4% in

premarket trading following the streaming video pioneer's

lackluster second-quarter forecast.

Shares of other streaming services providers such as Walt

Disney ( DIS ) and Roku ( ROKU ) dropped 1.2% and 1.5%,

respectively.

At 6:55 a.m. ET, Dow e-minis were down 126 points,

or 0.33%, S&P 500 e-minis were down 23.25 points, or

0.46%, and Nasdaq 100 e-minis were down 124.25 points,

or 0.71%.

The S&P 500 and the Nasdaq closed lower for

the fifth straight session on Thursday, as economic data and

comments from Fed officials suggested that the U.S. central bank

was unlikely to cut interest rates in the near future.

Federal Reserve policymakers have coalesced around the idea

of keeping borrowing costs where they are until perhaps well

into the year, given slow and bumpy progress on inflation, and a

still-strong U.S. economy.

Equities were rattled this week as investors readjusted

their expectations over by how much the Fed would cut rates this

year, with both the S&P 500 and the blue-chip Dow poised

for a third weekly decline, while the Nasdaq was set for its

fourth consecutive weekly loss, if current trend holds.

Money markets are now pricing in about 41 basis points (bps)

of cuts from the central bank, down from around 150 bps seen at

the beginning of 2024, according to LSEG data.

Most megacap growth stocks weighed, with Alphabet,

Nvidia ( NVDA ), Meta Platforms ( META ) and Tesla down

between 0.7% and 2.1%.

Shares of Paramount Global ( PARAA ) jumped 10.3% after a

person familiar with the matter told Reuters that Sony

Pictures Entertainment and Apollo Global Management ( APO ) are

discussing making a joint bid for the company.