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. stocks looked set to rise on Wednesday after a bruising start to the week, as Federal Reserve Chair Jerome Powell signaled the central bank would start raising rates this month despite uncertainties stemming from the Ukraine crisis.

In prepared remarks for his testimony to the U.S. House of Representatives Financial Services Committee, Powell reiterated the core Fed narrative that high inflation and an "extremely tight" labor market warrant higher interest rates.

Powell will testify before U.S. lawmakers at 10 a.m. ET (1500 GMT).

The overall mood, however, 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.

"This market is facing two critical tests right now: one is the Federal Reserve and how they will address inflation and the other is (the) war in Eastern Europe, and when we think about both those things, they're interrelated," Art Hogan, chief market strategist at National Securities.

"The consensus has shifted to a more moderately hawkish view versus an aggressively hawkish view and Powell's commentary aligns with the consensus thus far."

Morgan Stanley rose 0.7% 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/]

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

Meanwhile, data showed U.S. private employers hired more workers than expected in February as the labor market recovery gathers steam.

Russia said its forces took control of 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.

At 08:37 a.m. ET, Dow e-minis were up 101 points, or 0.3%, S&P 500 e-minis were up 9 points, or 0.21%, and Nasdaq 100 e-minis were up 11.5 points, or 0.08%.

Among other stocks, Nordstrom Inc surged 29.2% after the department store chain forecast upbeat full-year revenue and profit.