US STOCKS-S&P, Nasdaq set for higher open as worries over U.S.-Iran escalation ease

The S&P 500 and the Nasdaq were set for modest gains at the open on Wednesday as investors drew comfort from Iranian signals that overnight missile strikes "concluded" its retaliation to the killing of Qassem Soleimani. Futures tracking the S&P 500 tumbled as much as 1.7% overnight after Iranian forces fired missiles at military bases housing U.S. troops in Iraq, in response to the U.S. killing of the Iranian general.

"All is well!" U.S. President Donald Trump tweeted. He also said an assessment of casualties and damage was underway and that he would make a statement later in the day. One source said early indications were of no U.S. casualties. "The attack was much milder than many had feared. Also, it seems like the United States is gearing up to protect its interest in the Middle East," said Mark Grant, chief global strategist at B. Riley FBR Inc.

"A lot of this is a positive reaction to the fact that what has taken place so far hasn't been worse." In a morning note, NatWest Markets said: "there is an off-ramp here for U.S.-Iranian tensions, or at least for the conflict to move back to the shadow/proxy/economic sanction realm where it has resided."

At 08:51 a.m. ET, Dow e-minis were down 23 points, or 0.08%. S&P 500 e-minis were up 4.75 points, or 0.15%, and Nasdaq 100 e-minis were up 13 points, or 0.15%. Keeping Dow futures under pressure, Boeing Co fell 1.3% premarket after its 737-800 jet belonging to a Ukrainian airline burst into flames shortly after take-off from Tehran, killing all 176 people aboard.

In the latest upbeat U.S. data, the ADP National Employment Report showed private payrolls jumped by 202,000 jobs last month, much above the 160,000 rises expected by economists polled by Reuters. The numbers come ahead of the government's more comprehensive employment report for December scheduled for release on Friday.

Macy's Inc jumped 4.6% after reporting a better-than-feared 0.6% drop in holiday period same-store sales. Lennar Corp gained 3% after the No. 2 U.S. homebuilder beat quarterly profit estimates on the back of lower home prices and mortgage rates.

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