* Futures up: Dow 0.92 pct, S&P 0.58 pct, Nasdaq 0.70 pct
By Medha Singh
May 21 (Reuters) - U.S. stock index futures jumped on Monday, with manufacturers and chipmakers leading the gainers, after the United States and China put a potential trade war "on hold" while the world's two biggest economies work on a wider agreement.
The United States and China have agreed to drop their tariff threats on billions of dollars worth of each country's goods, U.S. Treasury Secretary Steven Mnuchin said on Sunday.
"'On Hold' is the term driving the markets today," Naeem Aslam, chief market analyst at Think Markets said in a note.
"Both countries have decided to work towards a long-term agreement, in other words, there may be no solution to this at all and both countries may just continue to trade with each other under the same old terms."
The cooling of tensions, which roiled global markets in recent months, elicited mixed reactions from U.S. business leaders.
While some were happy to see the prospect of damaging tariffs fade, others said it would be difficult for Washington to rebuild momentum to address what they see as troubling Chinese policies.
At 7:18 a.m. ET, Dow e-minis were up 227 points, or 0.92 percent. S&P 500 e-minis were up 15.75 points, or 0.58 percent and Nasdaq 100 e-minis were up 48 points, or 0.70 percent.
All 26 of the 30 Dow Jones Industrial Average components trading premarket were higher.
Shares of Boeing, which sells about a fourth of its commercial aircraft to Chinese customers, were up 1.4 percent. Caterpillar gained 1.8 percent.
The biggest Dow gainer was General Electric, which rose 2.3 percent after the company said it would merge its transportation business with rail equipment maker Wabtec .
Chipmakers, whose major clients include Chinese companies who often build the U.S. chips into devices sold back to Americans, also posted broad gains.
Intel was up 0.9 percent. Micron gained 2.5 percent, with Qualcomm, Nvidia, AMD and Applied Materials up between 1 percent and 1.6 percent.
Shares of regional bank MB Financial jumped 12.7 percent after Fifth Third Bancorp said it would buy the smaller rival in a $4.7 billion deal. Shares of Fifth Third fell 4.1 percent.
Fears of a potential Sino-U.S. trade war, which would have hurt the global economy, have roiled the markets in the recent months and spooked investors who have enjoyed a multi-year bull run.
Wall Street posted losses last week as U.S.-China trade summit, rising U.S. Treasury yields and increasing oil prices weighed on investor sentiment. (Reporting by Medha Singh in Bengaluru; Editing by Sriraj Kalluvila)