* US futures rise, oil prices moderate

* Investors focus on inflation risks

* Traders rapidly cut Fed rate cut wagers for year

* Markets grapple with uncertainty over duration of war

* Dollar stands tall, pushing yen to 20-month lows

(Retops, updates prices, adds strategist quote, adds latest

news from U.S., adds U.S. PCE data)

By Lucy Raitano and Ankur Banerjee

SINGAPORE/LONDON, March 13 (Reuters) - Stocks rose on

Friday after recent heavy selling, helped by lower oil prices,

although uncertainty over the Iran war continues to disrupt

energy supplies which is driving concerns over fuel inflation

and interest rates.

The price of oil fell below $100 per barrel, but remains

about 37% higher than when the United States and Israel launched

strikes on Iran almost two weeks ago.

President Donald Trump said the U.S. was going to be hitting

Iran "very hard over the next week", shortly after issuing a

partial 30-day waiver for purchases of sanctioned Russian oil,

hoping to ease prices fuelled by the U.S.-Israeli war on Iran.

U.S. futures pointed to gains with S&P 500 e-minis

rising 0.4%, following steep declines on Thursday that saw the

S&P 500 close 1.5% lower.

"It could simply be the case we've had two if not three days

of pretty aggressive selling across the board, and there's

simply a degree of exhaustion coming in," said Michael Brown,

senior research strategist at Pepperstone

"Crude benchmark is a touch softer, and everything on the

whole is still taking its lead from where oil is trading," he

said.

Europe's STOXX 600 reversed course after falling

during morning trading and was last 0.3% higher. But the index

remains on track for a 5.4% fall in March so far - its biggest

two-week decline in a year.

Meanwhile the dollar has become the safe-haven of choice

during the tumult, putting most other currencies under pressure.

The U.S. currency was set for a second consecutive week of gains

and is up 2.5% since the war began at the end of February.

Wolf von Rotberg, equity strategist at Bank J. Safra Sarasin

in Zurich, said there was a sense of urgency in markets over the

duration of the conflict.

"If we don't make any progress and just have a status quo

for a prolonged period ... that would obviously mean that oil

prices stay higher for longer, and we have a more pronounced

impact on the economy and on inflation," he said.

OIL PRICE DRIVING MARKET

Brent crude oil futures fell 1.3% to $99.19 a

barrel, while West Texas Intermediate crude was at $93.68

a barrel. Both had hovered around $60 at the start of 2026.

Traders are trying to predict how long the disruption to oil

supplies will last.

"Headlines are coming at the market like water from a fire

hose, which is impacting the price of oil, and consequently,

financial markets," said Mitch Reznick, group head of fixed

income at Federated Hermes.

With Iran stepping up attacks across the Middle East as its

new Supreme Leader Mojtaba Khamenei vowed to keep the Strait of

Hormuz shipping lane closed, investors are bracing for a

prolonged conflict and higher oil prices.

The spectre of rising inflation has led markets to rapidly

reprice what they expect from central banks this year, with

traders now anticipating just 20 basis points of easing from the

Federal Reserve compared to 50 bps of cuts priced in last

month.

Two-year Treasury yields, which typically move in step with

Fed interest rate expectations, hit a six-month high on

Thursday.

Elsewhere, the Personal Consumption Expenditure index, the

Federal Reserve's preferred inflation gauge, rose 0.3% in

January, on a monthly basis, in line with economists' estimates

of a 0.3% rise.

SHIFTING RATES OUTLOOK

Jose Torres, senior economist at Interactive Brokers, said

the impact of rising oil prices on corporate margins, inflation

expectations, rate-cut prospects and yields is sparking

volatility, leaving participants with few places to hide.

"Indeed, sinking optimism about Fed rate reductions amid

strengthening cost pressures is weighing on traditional safe

havens such as silver, gold, and government debt."

The two-year note yield fell 4 bps to 3.72% after

hitting its highest level since August 22 on Thursday. The yield

has gained about 35 bps in the two weeks since the war

started.

Investor focus will switch to a slate of policy meetings

next week with the Fed, the Bank of Japan, the European Central

Bank and the Bank of England all due to meet, with most expected

to keep rates unchanged. The Reserve Bank of Australia is

broadly expected to hike rates next week.

The yen hit its weakest level since July 2024 at

159.69 per U.S. dollar on Friday as Japan warned that it was

ready to take action to protect against yen declines. It was

last at 159.39.

Analysts said the bar for intervention is higher this time

around as any intervention now could prove futile in the face of

the relentless dollar buying.

In currencies, the euro fell 0.4% to $1.146525, on

course for a weekly decline of 1.3%. The dollar index was

at 100.7, set for about a 1% weekly advance.

Gold was 0.7% higher at $5,114.32 per ounce on Friday

but set for a 1.1% drop for the week.