US and European equity markets rallied Wednesday despite another jump in the price of oil and other commodities, taking solace from Federal Reserve comments suggesting a patient approach to hiking interest rates.

In the first of two congressional hearings, Fed Chair Jerome Powell adopted a moderate tone when it came to the need to balance the fight against inflation with the uncertain economic toll of the Russian invasion of Ukraine.

"The near-term effects on the US economy of the invasion of Ukraine, the ongoing war, the sanctions, and of events to come, remain highly uncertain," he said in his semi-annual testimony to Congress. "We will be monitoring the situation closely."

Powell's comments came a few hours after major oil exporters declined to increase output more quickly despite the Russian invasion.

The decision by Saudi Arabia, Russia and other top oil exporters lifted crude to multi-year highs, with futures for West Texas Intermediate for delivery in April jumping seven percent to $110.60.

Bjarne Schieldrop, chief commodities analyst at SEB, noted that "the global economy is facing energy starvation right now," while adding that "demand destruction will set a limit to the upside eventually," given the tightening of the physical oil market owing to sanctions towards Russia.

Other commodities also continued to rally, with European natural gas benchmarks hitting all-time highs, along with aluminum prices, amid worries over metals production from Russia.

"Supply outages from Russia are now but a question of time," said a note from Commerzbank. "Depending how long they last, they could cause turmoil on the markets -- in which case metals prices would presumably rise significantly further."

Still, solid gains by European equity bourses were followed by an upbeat US session, which saw the S&P 500 pile on nearly two percent.

"I'm not sure broader market sentiment has improved in any way since yesterday given the intensification of the invasion of Ukraine and soaring oil prices -- but equity markets are seeing some reprieve," said Craig Erlam, senior market analyst with Oanda.

In a hearing with House lawmakers, Powell said he favored a modest quarter-point increase in the benchmark borrowing rate rather than a more aggressive, half-point hike for the first step expected at the central bank's meeting later this month.

But, he said, "We will need to be nimble in responding to incoming data and the evolving outlook," and left open the possibility of bigger moves if inflation stays high.

Among individual companies, Ford jumped 8.4 percent as it announced it is creating separate businesses for its conventional and electric-auto operations, as it accelerates its build-out of emission-free vehicles.

The conflict in eastern Europe comes with prices already elevated owing to tight supplies and a strong recovery in global demand
The conflict in eastern Europe comes with prices already elevated owing to tight supplies and a strong recovery in global demand AFP / Sergey BOBOK

Brent North Sea crude: UP 7.6 percent at $112.93 per barrel

West Texas Intermediate: UP 7.0 percent at $110.60 per barrel

New York - Dow: UP 1.8 percent at 33,891.35 (close)

New York - S&P 500: UP 1.9 percent at 4,386.54 (close)

New York - Nasdaq: UP 1.6 percent at 13,752.02 (close)

London - FTSE 100: UP 1.4 percent at 7,429.56 (close)

Frankfurt - DAX: UP 0.7 percent at 14,000.11 (close)

Paris - CAC 40: UP 1.6 percent at 6,498.02 (close)

EURO STOXX 50: UP 1.5 percent at 3,820.59 (close)

Tokyo - Nikkei 225: DOWN 1.7 percent at 26,393.03 (close)

Hong Kong - Hang Seng Index: DOWN 1.8 percent at 22,343.92 (close)

Shanghai - Composite: DOWN 0.1 percent at 3,484.19 (close))

Euro/dollar: UP at $1.1126 from $1.1125 late Tuesday