US STOCKS-Wall St set for higher open after recent selloff, Mideast conflict widens

By Purvi Agarwal and Twesha Dikshit

March 30 (Reuters) - Wall Street's main indexes were set for a higher open on Monday after logging sharp declines in the previous session, following President Donald Trump's comments on the U.S. and Iran talks, while the Middle East conflict widened.

Trump said that the U.S. was in serious discussions with a "more reasonable regime" to end the war, but repeated his warning to open the Strait of Hormuz or risk U.S attacks on Iranian oil wells and power plants.

The comments come after Yemen's Iran-backed Houthi militia entered the war over the weekend and more U.S. troops arrived in the Middle East, escalating the conflict. Pakistan, which is acting as an intermediary, said "meaningful talks" could be hosted in the coming days.

Oil prices extended gains on Monday, sending energy stocks higher with Exxon Mobil XOM.N and Chevron CVX.N up over 1% each in premarket trading.

"The S&P 500 is still down less than 10% (since the war began). In many ways, investors have been affected less by the implications of the Strait of Hormuz being closed than I would have thought," said Sam Stovall, chief investment strategist at CFRA Research.

"Today's action is probably more of a technical bounce because many sectors and sub-industries are in oversold condition."

Wall Street's main indexes ended their fifth consecutive week in the red on Friday, with the blue-chip Dow confirming it was in a correction territory after closing more than 10% below its record high.

The Nasdaq and the small-cap Russell 2000 .RUT have also confirmed the correction territory since the war began. The benchmark S&P 500 is a little over 1% away from the mark.

Wall Street brokerage Morgan Stanley downgraded global equities to "equal weight" from "overweight", but said fund flows to U.S. equities and bonds had overtaken the rest of the world since the conflict began, indicating it might re-emerge as a safe haven for investors.

At 08:23 a.m. ET, Dow E-minis YMcv1 were up 298 points, or 0.66%, S&P 500 E-minis EScv1 were up 43.5 points, or 0.68% and Nasdaq 100 E-minis NQcv1 were up 154.75 points, or 0.66%.

Investors will closely monitor comments from Fed Chair Jerome Powell and New York Fed President John Williams, scheduled to speak later in the day.

A slew of labor market data, including the nonfarm payrolls figures for March, is scheduled for release this week and expected to provide more insight into the health of the economy.

The spike in oil prices resulting from the Iran conflict has revived inflation fears, prompting money market participants to price out any easing from the Federal Reserve this year, compared with two cuts before the war began, as per CME Group's FedWatch Tool.

Among other movers, Sysco's SYY.N shares dropped 8.3% before the bell after the food distributor said it would buy catering supplier Jetro Restaurant Depot in a $29 billion deal, including debt.

Shares of aluminum producers climbed as prices of the metal were trading at around four-year peaks. Alcoa AA.N and Century Aluminum CENX.O gained 10.5% and 12.8%, respectively.

U.S. markets will be closed on Friday for the Good Friday holiday.