US STOCKS-Wall St futures slip as Iran war rages on, investors dial down rate cut bets

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* Futures off: Dow 0.52%, S&P 500 0.59%, Nasdaq 0.82%

March 20 (Reuters) - U.S. stock index futures slipped in choppy trading on Friday as the Iran war approached its fourth week, roiling energy markets and prompting investors to aggressively reprice bets on interest rate cuts by the U.S. Federal Reserve.

A report said the Trump administration is considering plans to occupy or blockade Iran's Kharg Island to pressure Iran to reopen the Strait of Hormuz.

Crude prices rose, reversing all the losses recorded since major European nations, Japan and the United States hinted at efforts to boost energy supply. Brent crude prices were last up 1.7% at over $110 a barrel.

The CBOE volatility index, sometimes referred to as Wall Street's fear gauge, edged up 1.72 points to 25.78. Futures tracking the rate-sensitive Russell 2000 index slipped 1%.

Investors took some comfort in FedEx's (FDX) upbeat results and forecast despite geopolitical tensions and surging fuel costs, sending its shares up 10% in premarket trading. Rival United Parcel Service (UPS) added 1%.

FedEx (FDX), often seen as a barometer of business activity, said that global demand was holding steady at the start of March despite the war in Iran, while fuel surcharges were sheltering profits from surging fuel costs.

This week was packed with decisions by major global central banks that along with the Federal Reserve acknowledged how the conflict had complicated policymaking. While U.S. policymakers are still penciling in at least one quarter-point interest rate cut this year, investors are less convinced.

Traders have pushed their bets for a rate cut to sometime in 2027, from December 2026 earlier this month, according to LSEG-compiled data.

At 06:06 a.m. ET, Dow E-minis were down 242 points, or 0.52%, S&P 500 E-minis were down 39 points, or 0.59%. Nasdaq 100 E-minis were down 200.5 points, or 0.82%.

Wall Street's benchmark S&P 500 and the blue-chip Dow were on track to finish their fourth-straight week in the red, although a modest bounce-back in AI stocks such as Advanced Micro Devices (AMD) and Micron have cushioned the fall on the Nasdaq.

All the three indexes also slipped below their 200-day moving average, a technical indicator reflecting long-term momentum, while the small-cap-focused Russell 2000 index briefly logged a 10% drop from all-time highs earlier this week.

Super Micro Computer (SMCI) tumbled 23% after three people associated with the artificial intelligence server maker were charged with helping smuggle at least $2.5 billion of U.S. AI technology to China in violation of export laws.

Gains have been strong in energy stocks. The S&P 500 sector index is set for its thirteenth-straight week of gains as geopolitical events in Venezuela and the Middle East dominated much of the first quarter.

Energy stocks such as Halliburton (HAL) and Cheniere Energy added 1% and 3%, respectively.

Tegna (TGNA) gained 9.4% after the Federal Communications Commission said it approved the $3.54 billion sale of the local television station owner to Nexstar.. (Reporting by Johann M Cherian in Bengaluru; Editing by Saumyadeb Chakrabarty)