* Industrials, chipmakers set for gains
* Futures up: Dow 0.87 pct, S&P 0.56 pct, Nasdaq 0.75 pct (Changes comment, adds details, updates prices)
By Medha Singh
May 21 (Reuters) - Wall Street was set to open higher on Monday after the United States and China put a potential trade war "on hold" to work on a wider agreement, and as the announcement of $27.6 billion worth of merger deals lifted sentiment.
U.S. Treasury Secretary Steven Mnuchin said on Sunday the United States and China had agreed to drop their tariff threats on billions of dollars worth of each country's goods while China on Monday praised a significant dialling back of tensions.
That sounded good to stock market investors, who have grown increasingly worried that an outright trade war would hurt the global economy and put an end to Wall Street's multi-year bull run.
"I'm encouraged," said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in New York. "People view this trade war "on hold" as a positive. They are going to want to be back in the market."
"Technology, industrials, energy, financials, consumer discretionary are going to benefit today. You may include areas of the market that are involved in trade with China, I think that's what's going to help."
The cooling of tensions, though, elicited mixed reactions from U.S. business leaders, with some happy to see the trade spat easing while others said it would be difficult for Washington to rebuild momentum to address what they see as troubling Chinese policies.
At 8:46 a.m. ET, Dow e-minis were up 216 points, or 0.87 percent. S&P 500 e-minis were up 15.25 points, or 0.56 percent and Nasdaq 100 e-minis were up 51.5 points, or 0.75 percent.
All 29 of the 30 Dow components trading premarket were higher. Shares of Boeing, which sells about a fourth of its commercial aircraft to Chinese customers, were up 2.1 percent.
Heavy equipment makers Caterpillar and Deere gained more than 2 percent.
The biggest Dow gainer was General Electric, which rose 2.9 percent after the company said it would merge its transportation business with rail equipment maker Wabtec in a $11.1 billion deal.
Chipmakers, whose major clients include Chinese companies that often build the U.S. chips into devices sold back to Americans, also posted broad gains. Intel was up 1.2 percent and Micron surged 4.7 percent.
Shares of regional bank MB Financial jumped 14.5 percent after Fifth Third Bancorp said it would buy the smaller rival in a $4.7 billion deal. Shares of Fifth Third fell 5.7 percent.
LaSalle Hotel Properties gained after PE firm Blackstone said it would buy the U.S. hotel owner for $3.7 billion.
In other deals, data firm HIS Markit said it would buy smaller rival Ipreo from funds of BlackStone and Goldman Sachs for $1.86 billion, while power company NextEra agreed to pay $5.08 billion for some Southern Co assets. (Reporting by Medha Singh in Bengaluru; Editing by Sriraj Kalluvila)