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* Futures off: Dow 1.18%, S&P 500 1.31%, Nasdaq 1.57%
April 2 (Reuters) - Futures tracking Wall Street's main
indexes slid on Thursday as U.S. President Donald Trump signaled
more aggressive attacks on Iran, dampening expectations for an
end to the month-long war and sending crude prices up 6%.
In a closely watched address to the nation, Trump said
military operations would be intensified in the next two to
three weeks, a day after he told Reuters that the U.S. will be
"out of Iran pretty quickly".
The lack of clarity on the timeline and the objectives of
the conflict sent global markets reeling in March, with the
benchmark S&P 500 logging its biggest monthly loss in a
year and Brent crude prices marking their strongest monthly
performance on record. Crude prices were last up at $107 a
barrel.
Worries that higher energy costs could weigh on economic
growth and fuel price pressures have fanned uncertainty
regarding the outlook for the Federal Reserve's monetary policy.
Interest rate futures anticipate the Fed to leave interest
rates unchanged for much of the year, according to LSEG-compiled
data, against at least two rate cuts of 25 basis points each
before the war. Uncertainty fueled by the conflict had investors
price in close to a 50% chance of a rate hike at one point last
month.
At 3:05 a.m. ET, Dow E-minis were down 551 points,
or 1.18%, while S&P 500 E-minis were down 86.75 points,
or 1.31%. Nasdaq 100 E-minis declined 379 points, or
1.57%.
Futures tracking the rate-sensitive Russell 2000 index
fell nearly 2%, while Wall Street's fear gauge, the
CBOE VIX index, spiked 2.1 points to 26.68. Expectations
for an imminent end to the war had fueled risk taking on Wall
Street over the past two sessions, sending the VIX to a more
than one-week low.
Investors flocked to the safe-haven U.S. dollar,
while other traditional safe-havens such as precious metals took
a hit.
Focus will be on developments around Elon Musk's SpaceX,
which has confidentially filed for a U.S. initial public
offering and is expected to target a $1.75 trillion valuation,
according to a Reuters report that cited two people familiar
with the matter.
Smaller peers such as Rocket Lab ( RKLB ), Planet Labs
and Intuitive Machines ( LUNR ) rallied on Wednesday in
anticipation of renewed investor interest in the industry.
Remarks from Dallas Fed President Lorie Logan later in the
day will be scrutinized for any clues on interest rates, while a
weekly report on jobless claims is also expected, ahead of the
non-farm payrolls report for March on Friday.
U.S. markets will be closed on Friday on account of the Good
Friday holiday.
(Reporting by Johann M Cherian in Bengaluru; Editing by Mrigank
Dhaniwala)