US STOCKS-Wall St set to open lower as Middle East turmoil clouds Fed outlook

* Futures off: Dow 0.27%, S&P 500 0.30%, Nasdaq 0.40%

* Trump mulls Kharg Island takeover, report says

* S&P 500, Dow on track for fourth-straight weekly loss

* FedEx (FDX) up on strong forecast; Amazon (AMZN) plans smartphone comeback (Updates to before market open)

By Johann M Cherian and Utkarsh Hathi

March 20 (Reuters) - Wall Street's main indexes were set to open lower on Friday as the Iran war approached its fourth week, roiling energy markets and prompting investors to aggressively reprice bets on the Federal Reserve's interest-rate cuts.

The conflict in the Middle East showed no signs of easing as Iran attacked an oil refinery in Kuwait and a report said that the Trump administration is planning to occupy or blockade Iran's Kharg Island to pressure Iran to reopen the Strait of Hormuz.

Investors also weighed major nations' efforts to ease energy supplies, as Brent prices slipped 1% to $107 a barrel.

Offering some comfort, FedEx (FDX), often seen as a barometer of business activity, issued upbeat forecastsand said global demand was holding steady despite geopolitical tensions, sending its shares up 6.7% in premarket trading. Rival United Parcel Service (UPS) added 0.8%.

A flurry of central bank decisions this week along with the Fed acknowledged how the conflict had complicated policymaking. Fed Governor Christopher Waller said that if oil prices stay elevated for months it would start bleeding into core inflation.

While U.S. policymakers are still penciling in at least one quarter-point interest rate cut this year, markets 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.

"Central banks adopting a wait-and-see stance is the logical thing to do," said Michael Brown, senior research strategist at Pepperstone.

"However, raising the prospect of tightening policy, to counter what appears a low risk of inflation proving more prolonged, raises the likelihood that a policy mistake will be made."

At 8:57 a.m. ET, Dow E-minis were down 127 points, or 0.27%, and S&P 500 E-minis were down 19.75 points, or 0.30%. Nasdaq 100 E-minis were down 100.75 points, or 0.41%.

The CBOE volatility index, sometimes referred to as Wall Street's fear gauge, edged up 0.69 points to 24.75. Futures tracking the rate-sensitive Russell 2000 index slipped 0.40%.

Friday also marks the once-in-a-quarter simultaneous expiry of derivatives contracts tied to stocks, index options and futures, also known as "triple witching," which can boost trading volume and aggravate volatility.

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 24.6% 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 longest weekly winning streak on record with a thirteenth-straight week of gains as geopolitical events in Venezuela and the Middle East dominated much of the first quarter.

Halliburton (HAL) was up marginally and Cheniere Energy added 2.1% on Friday.

Amazon (AMZN) slipped 0.4%. Reuters reported that the megacap introduced its first smartphone, hoping to take on Apple and Samsung.

(Reporting by Johann M Cherian, Utkarsh Tushar Hathi in Bengaluru; Editing by Saumyadeb Chakrabarty and Maju Samuel)