(NewsNation Now) — Wall Street futures surged on Tuesday on signs of a de-escalation in tensions between Russia and Ukraine, with investors also awaiting key inflation data for clues on the path of interest rate hikes by the Federal Reserve.

Russia said some of its military units were returning to their bases after exercises near Ukraine, following days of U.S. and British warnings that Moscow might invade its neighbor at any time. 

However, it was not immediately clear if it was a temporary signal or any kind of significant pullback.

On Wall Street, futures for the S&P 500 jumped 1.5% while the same for the Dow Jones Industrials rose 1.2%. Markets in Europe were also significantly higher, following mostly declines in Asia.

Benchmark U.S. crude, up almost 15% since satellite imagery in November showed a significant build-up of Russian troops along the Ukraine border, lost $3.02 to $92.44 a barrel on the New York Mercantile Exchange. Crude climbed 2.5% on Monday and natural gas prices jumped 6.4%. Russia is a major energy producer, and military action that disrupts supplies could jolt markets and global industries. Brent crude, the international pricing standard, fell $2.77 to $93.71 a barrel.

Megacap growth stocks including Apple Inc AAPL.O, Google-owner Alphabet Inc GOOGL.O, Amazon.com Inc AMZN.O, Microsoft Corp MSFT.O, Meta Platforms Inc FB.O and Tesla Inc TSLA.O rose between 1.8% and 3.4% in premarket trading.

Big banks including JPMorgan Chase & Co JPM.N and Citigroup Inc C.N jumped 1% each. Occidental Petroleum OXY.N slipped 2.6%, leading energy shares lower as oil prices dropped from a seven-year high. O/R

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

“War or no war, it makes market very volatile. And that’s unfortunately what we have to deal with,” said Andrea Cicione, head of strategy at TS Lombard in London.

“Until markets feel comfortable enough that this is not going to happen, we’re going to get this kind of volatility quite regularly.”

At 7:10 a.m. ET, Dow e-minis 1YMcv1were up 382 points, or 1.11%, S&P 500 e-minis EScv1were up 68.75 points, or 1.56%, and Nasdaq 100 e-minis NQcv1were up 304 points, or 2.13%.

The major indexes have had a rocky start to 2022, with the tech-heavy Nasdaq .IXIC 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.

All eyes will be on producer prices data for January due at 08:30 a.m. ET.

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 ANET.N jumped 9.3% after the cloud infrastructure supplier forecast current-quarter revenue above estimates after handily topping fourth-quarter profit. 

A $5.4 billion deal to buy Israeli chipmaker Tower Semiconductor TSEM.TA sent shares of Intel Corp INTC.Oup by 1.7%. The deal gives Intel access to more specialized production, better positioning it to take advantage of the demand for semiconductors. 

Shares of other chipmakers also rose, with Nvidia Corp NVDA.O gaining 3.9% ahead of its results on Wednesday.

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