Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., January 26, 2022.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., January 26, 2022. Reuters / BRENDAN MCDERMID

U.S. stock indexes were set for a stronger open on Tuesday, led by gains in shares of megacap growth names and banks on signs of a de-escalation in tensions between Russia and Ukraine.

Russia said some of its military units were returning to their bases after exercises near Ukraine and mocked repeated Western warnings about a looming invasion, but NATO said it had yet to see any sign of de-escalation on the ground.

Megacap growth stocks including Apple Inc, Google-owner Alphabet Inc, Inc, Microsoft Corp, Meta Platforms Inc and Tesla Inc rose between 1.5% and 2.6% in premarket trading.

Big banks including JPMorgan Chase & Co and Citigroup Inc jumped 1% each. Occidental Petroleum slipped 2.5%, leading energy shares lower as oil prices dropped from a seven-year high. [O/R]

The CBOE Market Volatility index, a gauge for investor anxiety, fell back after shooting up to its highest level in nearly three weeks in the previous session.

"In the short-term, stocks are moving in lockstep with headlines from the Russia/Ukraine situation, and any indication of thawing tensions between Russia and Ukraine is enough to spark a small rally in stocks," said David Bahnsen, chief investment officer, the Bahnsen Group in Newport Beach, California.

At 8:52 a.m. ET, Dow e-minis were up 349 points, or 1.01%, S&P 500 e-minis were up 55 points, or 1.25%, and Nasdaq 100 e-minis were up 240.25 points, or 1.69%.

The major indexes have had a rocky start to 2022, with the tech-heavy Nasdaq down over 11.8% so far this year as geopolitical tensions rattled investors' sentiment already hit by worries over aggressive interest rate hikes by the Fed to combat surging inflation.

Data on Tuesday showed U.S. producer prices increased more than expected in January as supply chains remained snarled, another sign that high inflation could persist through much of this year.

"Those are bad numbers," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

"The Fed is going to have to start to handle (rising inflation) quickly, and the quicker they do it, the worse it's going to be for the stock market."

Markets are pricing a 60.5% chance of a 50 basis point hike and a 39.5% chance of a 0.25% hike at the central bank's March meeting. Minutes from the Fed's January policy meeting are due on Wednesday.

Arista Networks jumped 8.3% after the cloud infrastructure supplier forecast current-quarter revenue above estimates.

A $5.4 billion deal to buy Israeli chipmaker Tower Semiconductor sent shares of Intel Corp up by 1.1%. The deal gives Intel access to more specialised production, better positioning it to take advantage of demand for semiconductors.

Shares of other chipmakers also rose, with Nvidia Corp gaining 3.2% ahead of its results on Wednesday.

Battered travel stocks including those of carriers and cruise operators also rallied.

Marriott International Inc added 3.2% after its fourth-quarter results topped analysts' expectations, as increasing vaccination rates and holiday-season traffic boosted occupancy rates across its hotels.