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* Futures up: Dow 0.23%, S&P 500 0.15%, Nasdaq 0.12%

April 7 (Reuters) - U.S. stock index futures were muted

on Tuesday as investors exercised caution ahead of President

Donald Trump's deadline for Iran to reopen the Strait of Hormuz

while assessing reports suggesting negotiations to end the war.

Tehran refused to reopen the Strait of Hormuz and accept a

ceasefire deal on the eve of a Tuesday night deadline set by

Trump to agree to his demands or get "taken out".

However, the Iranian ambassador to Pakistan said "positive

and productive endeavours" by Islamabad to mediate an end to the

war were "approaching a critical, sensitive stage."

"There is still a sense of caution and pessimism about

Trump's deadline, as it seems unlikely that Iran will bend to

meet his demands before the deadline," said Kathleen Brooks,

research director at XTB.

"The market is in limbo for now, and that means a lack of

conviction on Tuesday."

Meanwhile, the U.S. said on Monday it would raise payments

to private insurers offering Medicare Advantage plans to older

adults in 2027 by 2.48% on average, an increase from the

near-flat change proposed earlier.

Shares of health insurers surged in premarket trading, with

UnitedHealth ( UNH ) up 6.7%, Humana gaining about 11%

and CVS Health ( CVS ) adding 6.1%.

At 5:20 a.m. ET, Dow E-minis were up 107 points, or

0.23%, S&P 500 E-minis were up 9.75 points, or 0.15% and

Nasdaq 100 E-minis were up 29.5 points, or 0.12%.

Wall Street's main indexes closed higher in the previous

session, marking the fourth consecutive session of gains for the

S&P 500 and the Nasdaq, as investors digested the Middle East

developments and positioned for the upcoming quarterly earnings

season.

Still, UBS Global Wealth Management trimmed its S&P 500

end-2026 target to 7,500 from 7,700.

This week, markets will scrutinize some inflation readings

to see if the spike in energy prices stemming from the conflict

has trickled into the economy.

The Iran war has complicated the interest rate outlook for

the Federal Reserve as it grapples with fears of revived

inflation against the backdrop of a resilient labor market.

Comments from Fed policymakers Austan Goolsbee, Philip

Jefferson and Mary Daly will be parsed through the day.

Among premarket movers, Broadcom ( AVGO ) shares gained 3.6%

after the chipmaker signed a long-term deal with Alphabet's

Google to develop its AI chips and other components.