U.S. stock futures climb, bolstered by media reports that the White House will soon announce a trade agreement with the U.K. The Federal Reserve leaves interest rates steady, but Fed Chair Jerome Powell warns that aggressive U.S. tariffs are "likely" fueling inflation and unemployment risks. Carmaker Toyota warns that its annual operating profit could fall due to the levies.

1. Futures rise

U.S. stock futures tick higher, as investors gauge reports of an upcoming trade deal between the U.S. and Britain and assess interest rate commentary from Federal Reserve Chair Jerome Powell.

By 03:46 ET (07:46 GMT), the Dow futures contract had jumped by 221 points, or 0.5%, S&P 500 futures had gained 41 points, or 0.7%, and Nasdaq 100 futures had risen by 202 points, or 1.0%.

The main averages advanced on Wednesday, buoyed by reports that U.S. export restrictions on artificial intelligence chips would be somewhat loosened. Semiconductor stock rallied late in the session, following a bout of volatility in the build-up to the Fed’s latest rate decision.

In individual stocks, Walt Disney (NYSE:DIS) shares rose, pulling up the blue-chip Dow Jones Industrial Average, after the entertainment behemoth’s second-quarter earnings and outlook topped estimates despite ongoing worries over economic uncertainty.

2. U.S. to announce trade deal with Britain - reports

President Donald Trump is anticipated to reveal the outlines of a trade agreement with the U.K. on Thursday, according to media reports.

The potential announcement, which would be the first trade-related agreement secured by the White House since it slapped tariffs on friends and foes alike, is expected to be a framework of a deal with tariff adjustments, the Wall Street Journal reported.

Writing on social media on Wednesday, Trump said the statement will revolve around a "MAJOR TRADE DEAL WITH REPRESENTATIVES OF A BIG, AND HIGHLY RESPECTED, COUNTRY", adding that it would be "THE FIRST OF MANY".

Details of the agreement were not immediately clear, the New York Times (NYSE:NYT) said, adding that both countries have discussed bringing down British tariffs on U.S. cars and farm products and scrapping British duties on U.S. tech firms.

White House officials have been pushing to notch trade deals with dozens of countries during a 90-day delay to Trump’s heightened "reciprocal" tariffs. However, despite the postponement, several tariffs are still in place, including universal 10% levies and other trade taxes on items like steel, aluminum and autos.

3. Fed warns of inflation, unemployment risks

The rate-setting Federal Open Market Committee left borrowing costs unchanged on Wednesday, as it flagged concerns that inflation and unemployment risks had climbed.

In a post-meeting press conference, Fed Chair Jerome Powell argued that Trump’s aggressive tariff agenda is "likely" to lead to push prices, weigh on job growth, and dent the broader the economy. Taken together, the outlook resembles a period of so-called "stagflation" in the world’s largest economy.

At the moment, most of Trump’s elevated "reciprocal" levies -- not including eye-watering duties of at least 145% on Chinese imports -- have been delayed until July. But Powell’s comments suggest that Fed officials remain wary that the tariffs could snap back into place later this year.

Heading into its latest rate decision, the Fed had been grappling with relatively mixed data. U.S. gross domestic product, a key gauge of growth, contracted in the first quarter, although other indicators showed that consumer spending and the labor market remain resilient.

Crucially, the Fed’s most recent statement "gave no hint" that it was considering more cuts to rates, said Paul Ashworth, Chief North America Economist at Capital Economics. Borrowing costs have stood at a target range of 4.25% to 4.5% since December.

Powell also noted that it was "not at all clear" what the appropriate response for monetary policy" should be at this time given the uncertainty around the tariffs.

4. Toyota warns of tariff hit

Japanese carmaker Toyota Motor (NYSE:TM) has warned that its profits could drop by a fifth in its current financial year due in large part to Trump’s tariffs.

The world’s best-selling auto manufacturer said it now projects that annual operating income will come in at 3.8 trillion yen ($26 billion), down from 4.8 trillion yen in its prior fiscal year.

CEO Koji Sato flagged that the murkiness around the future of the tariffs has made it difficult to plan for them, echoing comments from several other businesses during the latest quarterly earnings season. He noted that whether the tariffs are permanent or not is "not something we can decide".