* Futures: Dow down 0.04%, S&P 500 up 0.05%, Nasdaq up

0.10%

* March CPI data in focus, set for release at 8:30 a.m.

ET

* TSMC's US shares gain after Q1 revenue beat

(Updates prices)

By Purvi Agarwal and Avinash P

April 10 (Reuters) - U.S. stock index futures were flat

on Friday as investors awaited a key inflation report and

monitored geopolitical developments surrounding an uneasy truce

in the Middle East.

The announcement of a two-week ceasefire earlier this week

between the U.S. and Iran buoyed Wall Street, setting the S&P

500 on track for its largest weekly jump since November.

Meanwhile, the Dow is set to post its strongest gains since

June.

The March reading of the Consumer Price Index is scheduled

for release at 8.30 a.m. ET and is expected to show how elevated

energy prices from the Iran conflict impacted the world's

largest economy.

Consumer prices likely recorded their biggest increase in

nearly four years in March, with economists polled by Reuters

expecting the CPI to come in at 3.3% annually, which could

further dim hopes of monetary easing from the U.S. Federal

Reserve this year.

Money market participants are not pricing in any easing in

2026. They had expected two interest-rate reductions before the

war broke out, according to the CME Group's FedWatch. At a

particular point during the Iran conflict, they had raised bets

on a rate hike in December.

"While Fed officials expected higher oil prices to delay the

anticipated decline in US inflation toward their 2% target, we

continue to believe that the central bank remains on track to

cut rates later this year," said analysts at UBS Global Wealth

Management.

They expect "sequential core inflation to cool" in the

coming months as tariff effects fade and falling labor demand

potentially leads to an uptick in the unemployment rate, which

could strengthen the case for rate cuts.

At 06:53 a.m. ET, Dow E-minis were down 19 points,

or 0.04%, S&P 500 E-minis were up 3.25 points, or 0.05%,

and Nasdaq 100 E-minis were up 26.5 points, or 0.1%.

Investors also watched the developments in the Middle East

conflict as the two-week ceasefire between the U.S. and Iran

showed signs of strain ahead of the first round of talks,

scheduled for Saturday.

However, markets drew comfort from Israeli Prime Minister

Benjamin Netanyahu's comments that he was seeking direct talks

with Beirut, leading Wall Street's main indexes to close higher

on Thursday.

"Investors could be in for a fretful weekend as they wait

for indications of whether a path to lasting peace is possible.

Ahead of this, they may be tempted to hedge their bets", said

Dan Coatsworth, head of markets at AJ Bell.

Iran and the United States have accused each other of

violating ceasefire promises, making it a shaky truce, while the

Strait of Hormuz remains largely shut, making markets highly

sensitive to headline developments.

A preliminary reading of the University of Michigan's

consumer sentiment survey for April is due after markets open on

Friday.

In premarket movers, U.S.-listed shares of Taiwan

Semiconductor Manufacturing ( TSM ) rose 2.1% after

the world's largest contract chipmaker beat market forecasts for

first-quarter revenue.