Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., September 17, 2025. REUTERS/Brendan McDermid

By Sukriti Gupta and Twesha Dikshit

(Reuters) -U.S. stock index futures rose on Monday following Friday's pullback, as investors returned to risk assets after President Donald Trump's softer tone eased concerns over renewed U.S.-China trade tensions.

Trump on Friday said he would impose an additional 100% tariff on China's U.S.-bound exports, along with new export controls on critical U.S.-made software in retaliation for Beijing tightening rare earth restrictions.

The revived trade tensions sent the S&P 500 and the Nasdaq, both previously on track to register weekly gains, to suffer their steepest weekly declines in months.

However, in a more conciliatory tone over the weekend, Trump posted that "it will all be fine" and the U.S. did not want to "hurt" China.

China on Sunday blamed the U.S. for the escalation. However, Beijing did not roll out further countermeasures ahead of a potential meeting between Trump and his Chinese counterpart later this month, which the U.S. president threatened to cancel.

"The path for markets in the near term depend heavily on the path escalation takes," analysts at UBS Global Wealth Management said in a note.

"More generally, we think that the bull market remains intact and so pullbacks should offer an opportunity for investors, who are underallocated to equities, to consider adding long-term exposure."

The AI-driven momentum and optimism around U.S. rate cuts have helped markets in the recent months.

At 6:58 a.m. ET, Dow E-minis were up 419 points, or 0.92%, S&P 500 E-minis were up 84.5 points, or 1.28%, and Nasdaq 100 E-minis were up 449 points, or 1.84%.

Investor focus is also on the earnings season that kicks off this week with major U.S. banks including JPMorgan Chase, Goldman Sachs, Citigroup, and Wells Fargo set to release quarterly results on Tuesday.

Third-quarter S&P 500 earnings growth is expected to be 8.8% year-on-year, compared with annual growth of 13.8% in the last quarter, according to LSEG I/B/E/S data.

The season will be a crucial litmus test for U.S. stock markets and provide fresh clues on the economy at a time when major official data releases remain delayed due to a government shutdown that is currently in its 13th day.

In premarket trading, shares of "Magnificent Seven" companies rose following Friday's pullback. Nvidia was up 3.3%, Tesla gained 2.8%, Microsoft advanced 1.5%, Meta Platforms rose 1.9% and Alphabet added 1.6%.

JPMorgan was up 1.4% after unveiling a $1.5 trillion strategic investment plan.

StubHub Holdings gained 4.6% as multiple brokerages initiated coverage on the stock.

Estee Lauder rose about 5% after a Goldman Sachs rating upgrade, while Rocket Lab shares added 7.1% as Morgan Stanley raised its PT to a Wall Street high.

In the Middle East, Hamas handed over the first group of the last surviving Israeli hostages, a key step in ending two years of devastating conflict in Gaza as part of a ceasefire deal pushed by Trump.

(Reporting by Sukriti Gupta and Twesha Dikshit in Bengaluru; Editing by Maju Samuel)