US STOCKS-Wall St Indexes Set to Open Higher as Mideast Diplomacy Hopes, Earnings Lift Sentiment

• Futures up: Dow 0.24%, S&P 500 0.16%, Nasdaq up 0.2%
• Voyager Technologies climbs after NASA's selection for private astronaut mission
• Pepsi tops quarterly profit estimates

April 16 (Reuters) - Wall Street's main indexes were set to open higher on Thursday on rising hopes that the worst of the Middle East conflict had passed , while a wave of solid earnings allayed concerns about the health of the economy.

Although no agreement to end hostilities involving Iran has been reached, hopes of diplomatic progress have lifted sentiment.

The benchmark S&P 500 .SPX and Nasdaq .IXIC closed at record highs Wednesday, signaling renewed appetite for risk assets if diplomacy remains on track.

For now, markets are in a sweet spot where the ceasefire is holding, and there’s a real sense of hope that a deal will be reached very shortly, said Kathleen Brooks, research director at XTB.

At 8:38 a.m. ET, Dow E-minis YMcv1 were up 118 points, or 0.24%, S&P 500 E-minis EScv1 added 11 points, or 0.16%, Nasdaq 100 E-minis NQcv1 advanced 53.5 points, or 0.2%.

Sentiment also drew support after a senior Israeli official said Israel's cabinet had met on Wednesday to discuss a possible ceasefire in neighboring Lebanon.

Such a ceasefire could remove a key sticking point to secure a broader peace agreement. President Donald Trump has also indicated Washington could yet reach a deal with Tehran.

However, equities remain vulnerable if diplomacy gives way to renewed escalation.

"Ongoing negotiations may bring more reversals and contradictory news, keeping trading conditions perilous," said Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management.

RESULTS STEER SENTIMENT

Market moves could also become more idiosyncratic as the earnings season gathers pace, offering fresh catalysts for investors.

U.S. beverages giant PepsiCo PEP.O gained 0.7% premarket after beating quarterly profit estimates, while Travelers TRV.N fell 0.6% after its results. Netflix NFLX.O is also due to report after the markets close.

Most banks that have reported earnings so far this week surpassed estimates, stating that the consumer remains financially healthy, alleviating concerns about the growth engine of the U.S. economy.

Beaten-down sectors such as tech and software stocks have regained their footing this week. Small caps are also gaining ground, with the Russell 2000 index about 0.8% from its intraday record high.

Big movers in the premarket session included Myseum MYSE.O, which rose nearly fourfold after rebranding as Myseum.AI.

The rally came a day after a similar move by sneaker maker Allbirds BIRD.O and was reminiscent of last year's wave of companies pivoting to crypto treasury strategies, which sparked a buying frenzy in their shares.

Voyager Technologies VOYG.N rose 8% after NASA signed an order for the company to conduct the seventh private astronaut mission to the International Space Station, the company's first selection for such a mission.

Investors are also watching the shaky leadership transition at the Federal Reserve. Kevin Warsh, Trump's nominee to succeed Jerome Powell as Fed chair, appears to face a less smooth and less timely succession than previously expected.

Trump said on Wednesday that he would fire Powell from his seat on the U.S. central bank's Board of Governors if Powell does not vacate that post as well when his term as Fed chief ends on May 15.