US STOCKS-Wall St set to open lower as soaring oil prices, Fed caution rattle?investors

* Futures off: Dow and S&P 500 0.63%, Nasdaq 0.71%

* Micron Technology (MU) down 5% as higher spending plans draw scrutiny

* Brent crude hits $115/barrel on Middle East tensions, clouding inflation outlook

* Small-cap Russell 2000 futures drop 10% from record highs (Updates to before market open, prices throughout, and analyst comments)

By Johann M Cherian and Utkarsh Hathi

March 19 (Reuters) - Wall Street's main indexes were set to open lower on Thursday as crude prices soared on intensifying Middle Easthostilities, reviving inflation worries that have prompted the Federal Reserve to take a more cautious stance on interest rate cuts. A strong forecast from Micron Technology (MU) did little to uplift sentiment, with its shares dropping 5% in premarket trading, as investors mulled the chip company's higher spending plans given elevated borrowing costs. Other memory chip stocks that have rallied this year were also knocked down. SanDisk (SNDK) fell 5.2%, Western Digital (WDC) slipped 2.7%, while AI leader Nvidia (NVDA) dipped 0.9%. Brent crude prices hit $115 a barrel after Iran attacked energy facilities across the Middle East in retaliation to Israel's strike on its South Pars gas field. The U.S. benchmark, however, was trading at its widest discount to Brent in 11 years due to releases from U.S. strategic reserves and higher freight costs. The Fed left rates unchanged on Wednesday and Chair Jerome Powell flagged higher inflation ahead. He added it was too soon to gauge the repercussions of the war on the economy and stuck to the prior forecast of one 25-basis-point rate cut this year.

"Oil prices are now driving not just stock prices, but Federal Reserve policy, and while this may be a short-term phenomenon, it's the one the market is dealing with right now," said Dennis Follmer, chief investment officer at Montis Financial, in a note. Morgan Stanley joined Goldman Sachs and Barclays in pushing back its forecast for an interest rate cut to September from June. Traders are no longer pricing in a rate cut for this year and LSEG-compiled data now points to a dovish move only in mid-2027. At 08:40 a.m. ET, Dow E-minis were down 290 points, or 0.63% and S&P 500 E-minis were down 42 points, or 0.63%. Nasdaq 100 E-minis were down 172.75 points, or 0.71%,

Futures tracking the rate-sensitive Russell 2000 index were down more than 1%, marking a 10% drop from record highs. An index falling 10% from all-time highs on a close-to-close basis is called a correction. Stocks and bonds slid following the Fed verdict, sending the Dow and Nasdaq below their 200-day moving averages (DMA), while the benchmark S&P 500 hit a four-month low, putting it just a whisker away from breaching its own long-term moving average. The 200 (DMA) is a technical indicator reflecting long-term momentum.

Investors will be keen on any potential commentary from policymakers later in the day.

Meanwhile, weekly jobless claims unexpectedly fell last week, pointing to stable labor market conditions and a rebound in job growth in March. Also in focus will be a U.S.-Japan summit that President Donald Trump may use to press for help on the war in Iran after his earlier call on allies to safeguard passage through the strategic Strait of Hormuz went unanswered.

Energy price-sensitive travel stocks such as Delta Air and United fell more than 1%, while cruise stocks such as Norwegian and Carnival were down 0.5%. Expectations for higher interest rates and a stronger dollar weighed on prices of precious metals, sending miners such as Gold Fields and Endeavour Silver down 10%.

Shares of Tesla fell 1.5%. The National Highway Traffic Safety Administration has intensified its probe into millions of Tesla vehicles.

Among others, electric-vehicle maker Rivian jumped 9% as Uber (UBER) will invest up to $1.25 billion in the firm.

(Reporting by Johann M Cherian and Utkarsh Hathi in Bengaluru; Editing by Devika Syamnath)