April 17 (Reuters) - Futures tied to the S&P 500 and the Nasdaq regained some ground on Thursday on the final trading day of the week, with focus on U.S.-Japan tariff talks, while UnitedHealth's shares fell sharply following a forecast cut by the insurer.
U.S. President Donald Trump said the country had made "big progress" in talks with Japan, one of the first rounds of face-to-face negotiations since his sweeping imposition of duties on global imports roiled markets and stoked recession fears.
Investors will be closely watching all negotiation talks with dozens of countries over the coming weeks for more clarity on the size and scope of tariffs on individual nations and sectors.
Meanwhile, UnitedHealth (UNH.N), plummeted 19% after lowering its annual profit forecast on expectations of high medical costs for the remainder of the year. The stock weighed heavily on futures tied to the blue-chip Dow.
Other health insurers also fell, with CVS Health (CVS.N), down 9.1%, Centene (CNC.N), losing 8.7% and Humana (HUM.N), shedding 15%.
Upbeat results from Taiwan Semiconductor Manufacturing Co (TSMC) (2330.TW), helped U.S. chip stocks recover to some extent. Semiconductor shares had tumbled in the previous session after Nvidia (NVDA.O), flagged steep costs from new curbs on its AI chip exports to China.
TSMC's U.S.-listed shares jumped 3% in premarket trading, while Nvidia rose 0.5% after falling nearly 7% on Wednesday.
However, highlighting the sector's challenges, Intel (INTC.O), lost 1.6% after a report the company will need a license to sell some of its advanced artificial intelligence chips to China.
At 06:34 a.m., Dow E-minis were down 376 points, or 0.94%, S&P 500 E-minis were up 29 points, or 0.55%, and Nasdaq 100 E-minis were up 170.5 points, or 0.93%.
On Wednesday, U.S. Federal Reserve Chair Jerome Powell warned Trump's tariff policies risked pushing inflation higher while weakening economic growth, adding policymakers needed more clarity before adjusting policy.
"With Trump having shown greater tolerance to market turmoil than anticipated and Powell now refusing to throw a lifeline, equities remain vulnerable," analysts at ING said on Thursday.
Traders scaled back bets of a May interest rate cut, now pricing in just a 15.6% chance of a 25-basis point reduction from over 27% a week earlier, according to CME's FedWatch.
Ahead of the long weekend, all three major Wall Street indexes are on track for weekly losses, with the S&P 500 (.SPX), on pace to lose about 1.6%.
Amid volatile markets, last week was S&P's best week since November 2023. The week before that was its worst since 2020's pandemic-driven selloff.
The CBOE Volatility index (.VIX), has eased off last week's highs but remains sharply above its 50-day moving average, indicating investors continue to expect volatile markets.
"The chronic problems of U.S. policy volatility, related uncertainties and negative economic spillovers are set to linger," said Ken Wattret, global economist at S&P Global Market Intelligence.
March housing starts and weekly jobless claims data are on deck, with comments from Fed board Governor Michael Barr expected later in the day.
Netflix (NFLX.O), is scheduled to report results after the bell.
Reporting by Lisa Mattackal and Purvi Agarwal in Bengaluru; Editing by Shinjini Ganguli and Shounak Dasgupta
