US STOCKS-Wall St set for lower open after Trump's comments dent Iran resolution hopes
By Purvi Agarwal and Twesha Dikshit
April 2 (Reuters) - Wall Street's main indexes were set for a lower open on Thursday, in the last session of a holiday-truncated week, after President Donald Trump signaled more aggressive attacks on Iran, dampening expectations for a swift end to the Middle East conflict.
During a closely watched address to the nation on Wednesday, Trump said military operations would be intensified in the next two to three weeks, in a sharp reversal from his earlier comments that the U.S. will be "out of Iran pretty quickly".
Oil prices surged about 7%, taking Brent crude futures to $108 per barrel. Energy stocks in the U.S. climbed, with Exxon Mobil XOM.N and Chevron CVX.N up about 2.4% each in premarket trading.
"The problem is that we didn't learn anything new. We're back in a place where we know less, not more, about how we find an off ramp to this war," said Art Hogan, chief market strategist at B Riley Wealth.
"The market is going to retrace some of the constructive action we saw over the last couple of days here."
Earlier this week, markets were optimistic that an end to the war was near, putting Wall Street's three indexes on track for their biggest weekly rise in four months, and the first week of gains in six.
At 08:40 a.m. ET, Dow E-minis YMcv1 were down 641 points, or 1.37%, S&P 500 E-minis EScv1 were down 98 points, or 1.48% and Nasdaq 100 E-minis NQcv1 were down 452.25 points, or 1.87%.
Futures tracking the Russell 2000 index RTYcv1 fell 2.1%. Wall Street's fear gauge, the CBOE VIX index .VIX rose to 27.54 points after falling to an over one-week low on Wednesday.
The month-long Middle East conflict battered global markets in March, with the S&P 500 .SPX and the Nasdaq logging their biggest monthly losses in a year, and Brent crude prices marking their strongest monthly performance on record.
Money market participants are no longer pricing in any easing from the Federal Reserve, per CME Group's FedWatch Tool, as energy-driven inflationary concerns have clouded the central bank's monetary policy outlook. They were anticipating two cuts before the conflict began.
Investor focus will be on developments around Elon Musk's SpaceX, which confidentially filed for a U.S. initial public offering on Wednesday. The company is expected to target a $1.75 trillion valuation, according to a Reuters report, citing two people familiar with the matter, which prompted a rally in smaller peers.
Rocket Lab RKLB.O, Planet Labs PL.N and Intuitive Machines LUNR.O rallied on Wednesday in anticipation of renewed investor interest in the space industry.
Meanwhile, data showed the number of new Americans filing for unemployment benefits fell to 202,000 for the week ended March 28, below estimates of 212,000, according to economists polled by Reuters.
Nonfarm payroll numbers are expected on Friday, but U.S. markets will remain closed for the Good Friday holiday.
Investors are also awaiting comments from Dallas Fed President Lorie Logan later in the day.
In premarket moves, Globalstar's shares GSAT.O jumped 12.3% after a report said Amazon is in talks to buy the low-earth-orbit communication satellites company.
