Stocks showing losses are displayed at the entrance to the New York Stock Exchange (NYSE) in New York City, in New York, U.S., February 24, 2022.
Stocks showing losses are displayed at the entrance to the New York Stock Exchange (NYSE) in New York City, in New York, U.S., February 24, 2022. Reuters / CAITLIN OCHS

U.S. stock index futures notched cautious gains on Wednesday, ahead of Federal Reserve Chair Jerome Powell's testimony for clues on interest rates as the Ukraine crisis exacerbates concerns about inflation and growth.

The mood remained dour across global stock markets as Brent crude jumped to near eight-year highs and metal prices rallied after Western sanctions disrupted transport of commodities exported by Russia.

Wall Street indexes closed sharply lower on Tuesday with financial stocks bearing much of the damage as investors weighed the impact of harsh sanctions against Russia over its invasion of Ukraine.

Morgan Stanley rose 1.0% in premarket trading to lead gains among the big banks after two days of sharp declines. Shares of energy companies resumed their march higher as oil prices spiked above $110 a barrel. [O/R]

The S&P 500 banks index is down 7% so far this week as U.S. Treasury yields dropped amid a flight to safe-haven debt, while expectations of aggressive policy tightening by the Fed appeared to ease. [US/]

Powell will testify at 10 a.m. ET (1500 GMT) before the U.S. House of Representatives Financial Services Committee and his comments on the economy in nearly five weeks will confront a situation that has become markedly more complex since January.

"Lawmakers of both parties will grill him about soaring prices, the latest business surveys and energy prices suggest there's more inflation in the pipeline, and yet the markets are dialing back bets for tightening," wrote Marios Hadjikyriacos, senior investment analyst at online broker XM in a note.

"Someone has to be wrong here. We'll find out today what really scares the Fed - geopolitical uncertainty or spiraling inflation."

Traders now see a 5% probability of a 50 basis point rate hike by the Fed at its March meeting. [IRPR]

Russia said its forces took control the first sizable city, seizing Kherson, in south Ukraine, as fighting raged around the country. Kremlin said its delegations are ready to hold a second round of talks with Ukraine.

Companies around the world announced they were severing ties with Russia - Boeing Co suspended maintenance and technical support for Russian airlines, Apple Inc stopped sales of iPhones and other products and oil major Exxon Mobil said it would exit the country.

At 06:20 a.m. ET, Dow e-minis were up 172 points, or 0.52%, S&P 500 e-minis were up 23.75 points, or 0.55%, and Nasdaq 100 e-minis were up 99 points, or 0.71%.

Among other stocks, Nordstrom Inc surged 30.9% after the department store chain forecast upbeat full-year revenue and profit.

Hewlett Packard Enterprise gained 5.8% after the IT and hardware firm raised its FY22 profit outlook due to robust demand and profitability.