May 8 (Reuters) - U.S. stock index futures gained on Thursday on news that the Trump administration was on the cusp of a trade agreement with Britain, while chip stocks advanced on the prospect of fewer export curbs on AI semiconductors.
President Donald Trump said the U.S. and Britain would announce a trade deal at 10 a.m. ET to lower tariffs on some goods. If it goes through, the agreement would be the first since the United States paused the country-specific tariffs it imposed on world economies last month.
The news followed indications from the administration that negotiations with partners were underway, but the markets have not yet seen anything concrete on that front.
"Given that full trade deals take years to negotiate, this will likely be a framework and it will be interesting to see whether the 10% baseline tariff stays," Deutsche Bank strategists led by Jim Reid said.
Officials said earlier in the week that representatives from the U.S. and China would meet over the weekend in Switzerland for "ice-breaker" trade discussions after weeks of tit-for-tat tariffs that have sparked worries about global economic growth.
Trump's erratic trade policies and lack of clarity on tariff implementation have kept investors, consumers and the U.S. Federal Reserve in wait-and-watch mode.
As markets move toward the close of earnings season, the outlook for companies remains a top priority to gauge how they plan to navigate tariff-induced uncertainty.
Krispy Kreme's (DNUT.O), shares sank up to 30% after the restaurant chain became the latest to withdraw its full-year forecast.
At 07:05 a.m. ET, Dow E-minis were up 390 points, or 0.95%, S&P 500 E-minis were up 62.5 points, or 1.11%, and Nasdaq 100 E-minis were up 282.5 points, or 1.42%.
The U.S. central bank held interest rates steady on Wednesday and flagged heightened risks of inflation and unemployment, further clouding the economic outlook for the world's biggest economy.
At the Fed's meeting, Chair Jerome Powell said it was unclear what an appropriate monetary policy response was at the moment, reiterating the central bank's dependence on data.
Traders now see a rate cut only by September and are pricing in a total of 75 basis points of lowering by 2025-end, according to data compiled by LSEG.
On the economic front, markets will parse a weekly report on jobless claims that is expected at 8:30 a.m. ET.
Semiconductor stocks built on gains from the previous session. Nvidia (NVDA.O), was up 1.7% in premarket trading, Broadcom (AVGO.O), rose 2% and Advanced Micro Devices (AMD.O), advanced 1.6%.
Chip stocks buoyed Wall Street to a higher close on Wednesday after a spokesperson said the Trump administration was planning to rescind and modify a rule that curbed the export of sophisticated artificial-intelligence chips.
Among others, U.S.-listed shares of Arm plunged 9.2% after the chipmaker forecast first-quarter revenue and profit below Wall Street estimates.
Tapestry (TPR.N), added 8% after the luxury group raised its annual forecasts, while Warner Bros. Discovery (WBD.O), gained 2.4% after quarterly results.
Fortinet (FTNT.O), slumped 7.4% after the cybersecurity firm's second-quarter revenue forecast came in below estimates.
Reporting by Purvi Agarwal and Johann M Cherian in Bengaluru; Editing by Pooja Desai
