* Indexes down: Dow 1.06%, S&P 500 0.94%, Nasdaq 1.27%

* Unity Software's ( U ) shares climb after preliminary Q1

results

* Carnival Corp ( CCL ) drops on cutting annual adjusted profit

forecast

* Multiple Fed speakers on deck

(Updates on market open)

By Purvi Agarwal and Twesha Dikshit

March 27 (Reuters) - Wall Street's main indexes fell on

Friday as the month-long Middle East war dragged on, weighing on

sentiment, while investors watched for any signs of

de-escalation.

President Donald Trump said on Thursday he would again

extend a deadlineasking Iran to reopen the Strait of Hormuz or

face the destruction of its energy plants, after Tehran earlier

rejected a 15-point U.S. proposal to end the fighting.

The postponement did not calm markets, however, and oil

prices rose as investors were skeptical about the two sides

reaching an agreement.

"Financial markets remain headline-driven. Investors are

being buffeted by U.S. claims that progress is being made to end

hostilities, while Iran denies that any serious negotiations are

taking place," said David Morrison, senior market analyst at

Trade Nation.

"It seems obvious that neither side is close to accepting

the other's conditions for peace, so for now, the war

continues."

The S&P 500 and the Nasdaq stayed on track for their fifth

week of losses. The Dow was set to end the week little changed.

The CBOE Volatility Index, considered Wall Street's

fear gauge, was up 2.56 points at 30.

At 10:09 a.m. ET the Dow Jones Industrial Average

fell 1.06%, the S&P 500 lost 0.94%, and the Nasdaq

Composite shed 1.27%.

The S&P 500communication services index remained

under pressure and was down 0.9% as Alphabet and Meta

posted declines of 1.2% and 1.7%, respectively.

Software stocks were also hit, with the iShares Expanded

Tech-Software sector ETF falling 3.4% to a more than

one-month low.

Consumer discretionary stocks lost 1.4%.

Cruise-operator Carnival Corp ( CCL ) was down 1.3% after

cutting its annual adjusted profit forecast.

Oil prices were up nearly 3%, weighing on airline stocks,

with American Airlines ( AAL ) and United Airlines down

1.2% each.

On Thursday, the Nasdaq ended more than 10% lower from its

record close, confirming it had been in correction territory.

The Russell 2000, the first on the correction path,

confirmed it last Friday.

"The speed of the market's declines in recent weeks and the

fact that most of this fear has been driven by a single

narrative, geopolitical tensions, suggests that the market is in

the midst of a correction, and not a bear market," said Glen

Smith, chief investment officer, GDS Wealth Management.

The spike in oil prices as a result of the Iran war has

brought inflation fears to the forefront, complicating the

future rate-cut path for central banks.

Money market participants are not pricing in any easing from

the U.S. Federal Reserve this year, compared with two cuts

anticipated before the conflict broke out, according to CME's

FedWatch Group. Expectations of a rate hike in December were

last at 49%.

University of Michigan consumer sentiment data released on

Friday showed consumer sentiment was at 53.3 versus a

preliminary reading of 55.5.

Investors will look for commentary from regional Fed

Presidents Thomas Barkin, Mary Daly and Anna Paulson later in

the day.

In individual movers, Unity Software's ( U ) shares jumped

11.7% after the maker of videogame software reported

first-quarter preliminary revenue above analysts' estimates.