* Futures off: Dow and S&P 500 0.63%, Nasdaq 0.71%

* Micron Technology ( MU ) down 5% as higher spending plans draw

scrutiny

* Brent crude hits $115/barrel on Middle East tensions,

clouding inflation outlook

* Small-cap Russell 2000 futures drop 10% from record

highs

(Updates to before market open, prices throughout, and analyst

comments)

By Johann M Cherian and Utkarsh Hathi

March 19 (Reuters) - Wall Street's main indexes were set

to open lower on Thursday as crude prices soared on intensifying

Middle Easthostilities, reviving inflation worries that have

prompted the Federal Reserve to take a more cautious stance on

interest rate cuts.

A strong forecast from Micron Technology ( MU ) did little to

uplift sentiment, with its shares dropping 5% in premarket

trading, as investors mulled the chip company's higher spending

plans given elevated borrowing costs.

Other memory chip stocks that have rallied this year were also

knocked down. SanDisk ( SNDK ) fell 5.2%, Western Digital ( WDC )

slipped 2.7%, while AI leader Nvidia ( NVDA ) dipped

0.9%.

Brent crude prices hit $115 a barrel after Iran attacked

energy facilities across the Middle East in retaliation to

Israel's strike on its South Pars gas field. The U.S. benchmark,

however, was trading at its widest discount to Brent in 11 years

due to releases from U.S. strategic reserves and higher freight

costs.

The Fed left rates unchanged on Wednesday and Chair Jerome

Powell flagged higher inflation ahead. He added it was too soon

to gauge the repercussions of the war on the economy and stuck

to the prior forecast of one 25-basis-point rate cut this year.

"Oil prices are now driving not just stock prices, but Federal

Reserve policy, and while this may be a short-term phenomenon,

it's the one the market is dealing with right now," said Dennis

Follmer, chief investment officer at Montis Financial, in a

note.

Morgan Stanley joined Goldman Sachs and Barclays in pushing back

its forecast for an interest rate cut to September from June.

Traders are no longer pricing in a rate cut for this year and

LSEG-compiled data now points to a dovish move only in mid-2027.

At 08:40 a.m. ET, Dow E-minis were down 290 points, or

0.63% and S&P 500 E-minis were down 42 points, or 0.63%.

Nasdaq 100 E-minis were down 172.75 points, or 0.71%,

Futures tracking the rate-sensitive Russell 2000 index

were down more than 1%, marking a 10% drop from record

highs. An index falling 10% from all-time highs on a

close-to-close basis is called a correction.

Stocks and bonds slid following the Fed verdict, sending the Dow

and Nasdaq below their 200-day moving averages

(DMA), while the benchmark S&P 500 hit a four-month low,

putting it just a whisker away from breaching its own long-term

moving average. The 200 (DMA) is a technical indicator

reflecting long-term momentum.

Investors will be keen on any potential commentary from

policymakers later in the day.

Meanwhile, weekly jobless claims unexpectedly fell last

week, pointing to stable labor market conditions and a rebound

in job growth in March.

Also in focus will be a U.S.-Japan summit that President Donald

Trump may use to press for help on the war in Iran after his

earlier call on allies to safeguard passage through the

strategic Strait of Hormuz went unanswered.

Energy price-sensitive travel stocks such as Delta Air

and United fell more than 1%, while cruise

stocks such as Norwegian and Carnival were down

0.5%.

Expectations for higher interest rates and a stronger dollar

weighed on prices of precious metals, sending miners such as

Gold Fields and Endeavour Silver down 10%.

Shares of Tesla fell 1.5%. The National Highway

Traffic Safety Administration has intensified its probe into

millions of Tesla vehicles.

Among others, electric-vehicle maker Rivian jumped

9% as Uber ( UBER ) will invest up to $1.25 billion in the firm.