US STOCKS-Wall St futures inch lower as Middle East war enters second week

By Kanchana Chakravarty and Sukriti Gupta

June 20 (Reuters) - Wall Street stock index futures edged lower on Friday, pressured by uncertainty around U.S. involvement in the Iran-Israel war and concerns of rising inflation ahead.

As the fatal aerial war between Israel and Iran approached its second week, the White House said on Thursday President Donald Trump will decide in the next two weeks whether the U.S. will get involved on Israel's side.

Trump has kept the world guessing on his plans - veering from proposing a swift diplomatic solution to suggesting the U.S. might join the fighting on Israel's side.

"While the immediate prospect of a U.S. intervention in Iran may have diminished, the fact this is reportedly a two-week hiatus means it will remain a live issue for the markets going into next week," Dan Coatsworth, investment analyst at AJ Bell, said in an email.

The oil price volatility triggered by the Middle East conflict has become a fresh concern as the U.S. grapples with tariff-based price pressures.

The Fed, expected to balance the risk of slowing growth and higher inflation, kept interest rates unchanged on Wednesday, in line with market expectations. Policymakers, however, cautioned about inflation picking up pace over the summer as the economic effects of Trump's steep import tariffs kick in.

Money market moves show traders are pricing in about 47 basis points of rate cuts by the end of 2025, with a 57% chance of a 25-bps rate cut in September, according to CME Group's FedWatch tool.

At 07:14 a.m. ET, Dow E-minis YMcv1 were down 84 points, or 0.2%, S&P 500 E-minis EScv1 were down 10 points, or 0.17%, and Nasdaq 100 E-minis NQcv1 were down 37 points, or 0.17%.

The S&P 500 .SPX and the Nasdaq .IXIC are set for weekly gains, while the blue-chip Dow .DJI is on track for mild weekly declines.

Crypto stocks rose in premarket trade as bitcoin prices soared 1.7%. Coinbase Global COIN.O was up 1.8%, and Strategy MSTR.O gained 1%.

Shares of Tesla TSLA.O gained 1.4% among megacap stocks.

Stablecoin issuer Circle CRCL.N extended gains from its previous session, with shares last up 11.7%.

Accenture ACN.N fell 3.9% after the IT services provider said new bookings decreased in the third quarter.

CarMax KMX.N gained 8.8% after the used-car retailer posted stronger-than-expected revenue and profit for the first quarter.

GMS GMS.N shares rose 28.3% after QXO QXO.N made an offer on Wednesday to acquire the company for about $5 billion in cash. Shares of QXO were up 3.1%.

Wall Street's strong gains last month, primarily driven by a softening in Trump's trade stance and strength in corporate earnings, had pushed the benchmark S&P 500 index close to its record peaks before the ongoing conflict in the Middle East made investors risk-averse.

The S&P 500 index stood nearly 3% below its record level, and the tech-heavy Nasdaq remained 3.3% lower.

Philadelphia Fed business outlook data for June is scheduled at 08:30 a.m. ET.