US STOCKS-Wall Street set to open lower as Ukraine optimism fades
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* U.S. bond market signals economic pain ahead
* Micron Technology, Lululemon Athletica up on strong forecast
* Private payrolls increased by 455,000 jobs in March
* Futures down: Dow 0.28%, S&P 0.32%, Nasdaq 0.53% (Adds comment; updated prices, details)
By Bansari Mayur Kamdar and Amruta Khandekar
March 30 (Reuters) - U.S. stock index futures slipped on Wednesday, as optimism around Ukraine-Russia peace talks waned and investors fretted over the prospect of rapid rise in interest rates hurting economic growth.
The Kremlin said there was no sign of a breakthrough yet, but welcomed Kyiv's move to set out its demands in written form.
Markets had rallied in the previous session after Russia pledged to cut down military operations around Kyiv and in northern Ukraine. Contrary to the promise, Russian forces on Wednesday bombarded a besieged city in northern Ukraine.
Worries about the fallout of the nearly five-week long invasion and rising rates have hammered markets in the first quarter, putting the Wall Street indexes on course for their worst three months since the selloff during the peak of the pandemic in 2020.
Still, the indexes are set to end March higher, with the S&P 500 erasing more than half of its quarterly losses in the last few days, powered by upbeat economic data and gains in megacap stocks.
"The markets need to consolidate some of the gains, digest the potential inversion of the 2-10 spread and the possibility of a negotiated settlement," said Thomas Hayes, chairman at Great Hill Capital in New York.
"You've got end-of-quarter rebalancing, which is having an impact."
Shares of Apple, which have gained for 11 straight sessions, inched 0.6% lower in premarket trading.
Tesla Inc, Meta Platforms Inc, Amazon.com Inc, Alphabet Inc and Microsoft Corp also slipped between 0.2% and 0.7%. The NYSE FANG+TM index is up 8.8% so far this month.
Investors have also begun to doubt the sustainability of a surge in markets against the backdrop of a hawkish Federal Reserve, warnings of recession from the bond market and geopolitical uncertainty.
The widely tracked U.S. 2-year/10-year Treasury yield curve briefly inverted on Tuesday for the first time since September 2019, as bond investors bet that aggressive tightening by the Fed could hurt the U.S. economy over the longer term.
At 08:40 a.m. ET, Dow e-minis were down 98 points, or 0.28%, S&P 500 e-minis were down 15 points, or 0.32%, and Nasdaq 100 e-minis were down 80 points, or 0.53%.
Oil majors Exxon Mobil Corp and Chevron Corp recovered about 0.7% each as crude prices clawed back some of this week's heavy losses.
Micron Technology rose 1.9% after the chipmaker forecast third-quarter revenue above Wall Street estimates.
Lululemon Athletica Inc jumped 6.2% after forecasting full-year profit and revenue above estimates as demand for athletic wear remains strong even as people return to offices.
Meanwhile, U.S. private employers maintained a strong pace of hiring in March, data showed, in a boost to the labor market. The numbers come ahead of the more comprehensive nonfarm payrolls report on Friday. (Reporting by Bansari Mayur Kamdar and Amruta Khandekar in Bengaluru; Editing by Sriraj Kalluvila and Arun Koyyur)
