* Energy stocks, gold miners track higher commodity prices
* Bank stocks fall as U.S. bond yields slide
* Incyte Corp plunges as its drug fails a trial
* Futures slump: Dow 0.97%, S&P 1.10%, Nasdaq 1.24%
(Updates prices)
By Manas Mishra
Jan 3 (Reuters) - U.S. stock index futures shed about 1% on
Friday after a U.S. air strike in Iraq killed a top Iranian
commander, sharply escalating geopolitical tensions in the
Middle East and denting risk appetite.
Iran's Supreme Leader Ayatollah Ali Khamenei vowed harsh
revenge after Qassem Soleimani, head of Iran's elite Quds Force,
was killed in the air strike in Baghdad that was authorized by
President Donald Trump. The flaring tensions sent prices of perceived safe-haven
assets soaring, while threatening to derail a recent rally in
stocks.
Optimism over an initial trade deal between U.S. and China
and an improving global outlook in recent weeks have encouraged
risk-on sentiment, helping extend Wall Street's longest bull run
on record.
The three main indexes .SPX .DJI .IXIC closed at
record highs on Thursday as fresh steps by China's central bank
to boost its economy added to investor optimism over trade.
At 7:18 a.m. ET, Dow e-minis 1YMcv1 were down 279 points,
or 0.97%. S&P 500 e-minis EScv1 were down 35.75 points, or
1.1% and Nasdaq 100 e-minis NQcv1 were down 110.5 points, or
1.24%.
Tracking higher oil prices, shares of oil majors Exxon Mobil
Corp XOM.N and Chevron Corp CVX.N rose 1.3% and 1.2%,
respectively, in premarket trading.
Marathon Oil Corp MRO.N , Occidental Petroleum Corp OXY.N
and Schlumberger SLB.N were some of the top gainers among S&P
500-listed stocks, rising about 1.7% and 3.3%.
American Airlines Group Inc AAL.O and Southwest Airlines
Co LUV.N fell 0.8% and 1.3% on prospects of higher costs.
Gold prices rose 1%, driving gains in miners such as Newmont
Goldcorp NEM.N . MKTS/GLOB
Shares of interest-rate sensitive banks also tumbled, with
Bank of America Corp BAC.N and Citigroup Inc C.N down
between 1.9% and 2.3% as investors fleeing to the safety of U.S.
Treasury pressured yields. US/
Drugmaker Incyte Corp INCY.O slumped 11.6% after a
late-stage clinical trial of its experimental drug for treating
an acute form of transplant rejection failed.