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

Wall Street surged on Wednesday after Federal Reserve Chair Jerome Powell signaled the central bank would likely raise interest rates less than some investors had feared.

Powell's comments, in testimony to the U.S. House of Representatives Financial Services Committee, helped calm investors after Russia's invasion of Ukraine sent markets into a tailspin.

Powell said he is inclined to support a 25 basis point rate hike in March, quelling some concerns about the potential for a more aggressive rate hike.

Traders now see a 95% probability of a 25 basis point hike in March. [IRPR]

All the 11 S&P 500 sector indexes advanced, with financials rebounding 2.8% after falling sharply so far this week. The banks index climbed 3.3% after hitting its lowest level since September 2021 in the previous session.

Energy shares resumed their march higher, with the S&P 500 energy index up 2.9% as Brent crude jumped to near eight-year highs after Western sanctions disrupted transport of commodities exported by Russia.

Russia's week-old invasion has yet to achieve its aim of overthrowing Ukraine's government. Ukrainians said they were battling on in the port of Kherson, the first sizeable city Russia claimed to have seized, while air strikes and bombardment caused further devastation in other cities.

"From day to day you go from the fear of escalation that could make things very bad to the hope that it will not really happen and that cooler heads will prevail, and that the economy is strong enough to get through this," said Tom Martin, senior portfolio manager at GLOBALT Investments in Atlanta.

Apple was up 2.3% after announcing a product launch for March 8, when it is expected to promote a low-cost version of its popular iPhone with 5G.

In afternoon trading, the Dow Jones Industrial Average was up 2.13% at 34,004.63 points, while the S&P 500 gained 2.17% to 4,399.6.

The Nasdaq Composite added 1.8% to 13,775.97.

Data showed U.S. private employers hired more workers than expected in February as the labor market recovery gathered steam.

Nordstrom Inc surged 37% after the department store chain forecast upbeat full-year revenue and profit.

The Philadelphia Semiconductor Index jumped 3.8%, lifted by a nearly 9% jump in Micron Technology.

Advancing issues outnumbered declining ones on the NYSE by a 2.71-to-1 ratio; on Nasdaq, a 2.11-to-1 ratio favored advancers.

The S&P 500 posted 25 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 44 new highs and 107 new lows.