* Futures up: Dow 1.12%, S&P 500 0.95%, Nasdaq 1.52%

* Airlines and cruise operators climb; energy stocks lead

losses

* Fed decision due on Wednesday

* Investors await earnings from 'Mag 7' companies

(Updates numbers)

By Johann M Cherian and Ragini Mathur

July 27 (Reuters) - Wall Street futures climbed on Monday

after the United States and Iran announced a pause in

hostilities over the weekend, driving oil prices sharply lower

and boosting risk appetite ahead of a week of major earnings,

economic data and an interest rate decision.

A wide swathe of stocks sensitive to energy prices rose in

premarket trading. United Airlines and Southwest

Airlines ( LUV ) were up 4% and 3.6%, respectively. Cruise

operators Royal Caribbean and Carnival rose 2.4%

and 3.2%, respectively.

A 7.8% slide in Brent Crude prices to $89.23 a

barrel weighed on shares of energy companies. Occidental

Petroleum ( OXY ) and Exxon Mobil were down 4% and 3.1%,

respectively.

Markets ended last week rattled by escalating Middle East

tensions, with investors worried the conflict could fuel further

price pressures ahead of the Fed's monetary policy decision due

on Wednesday.

Despite the announcement of the pause in attacks, shipping

through the crucial Strait of Hormuz remained low. Attacks by

Yemen's Iran-aligned Houthis on Saudi oil installations along

the Red Sea coast, another waterway vital to the global oil

trade, also kept traders on edge.

The Fed has offered few clues on monetary policy outlook

since Kevin Warsh took over as chair, fueling uncertainty over

the path ahead for interest rates.

Investors are pricing in at least 25 basis points worth of

rate hikes this year, with a 31% chance it could come as early

as this week, LSEG-compiled data showed.

Data on June durable goods is expected later on Monday and

the Personal Consumption Expenditures Price Index is due a day

after the central bank's decision. The Fed's preferred inflation

gauge will likely play a key role in shaping market expectations

for interest rates later this year.

"Policymakers face a difficult trade-off between evidence

that inflation had been moderating and growing signs that higher

oil prices could create a more persistent inflation shock,"

analysts at Deutsche Bank said in a note.

At 7:18 a.m. ET, Dow E-minis were up 583 points, or

1.12%, and S&P 500 E-minis were up 70.5 points, or

0.95%. Nasdaq 100 E-minis were up 429.75 points, or

1.52%.

Futures tracking the interest-rate-sensitive Russell 2000

small-cap index rose 1.4%, while the CBOE Volatility

Index dipped 1 point to 17.59.

Earnings from several 'Magnificent Seven' companies,

including Microsoft ( MSFT ), Amazon.com ( AMZN ), Meta

and Apple ( AAPL ), will test the AI trade further this week.

Microsoft ( MSFT ), Amazon ( AMZN ) and Meta were up over 1% each, while Apple ( AAPL )

edged up 0.3%. Among chip stocks, Applied Materials ( AMAT )

gained 4.3%, Western Digital ( WDC ) added 3.4% and industry

leader Nvidia ( NVDA ) rose 0.7%.

Negative cash-flow reports from Alphabet and Tesla

last week added to concerns about debt-fueled corporate

spending on developing technology. Chinese chipmaker CXMT Corp's

stellar debut also signaled intensifying competition

for the U.S. semiconductor industry.

The tech-heavy Nasdaq is down 8% from its record

high, while earlier this month the Philadelphia SE Semiconductor

Index confirmed it has been in "bear market" territory

since late June.

An index closing 10% below its most recent record high is

called a technical correction, while a 20% drop is referred to

as a bear market.

(Reporting by Johann M Cherian and Ragini Mathur in Bengaluru;

Editing by Saumyadeb Chakrabarty and Joyjeet Das)