By Yasin Ebrahim
Investing.com -- The S&P 500 rallied Tuesday, as signs of easing Russia-Ukraine tensions gave investors the green light to buy the recent dip in stocks, with tech stocks leading the charge.
The S&P 500 rose 1.6%, the Dow Jones Industrial Average added 1.2%, or 422 points, the Nasdaq Composite gained 2.8%.
President Vladimir Putin said Russia was “of course” not looking to go war with Ukraine, and pointed to proposals laid out by Moscow as a basis for finding a diplomatic resolution to Ukraine's security crisis.
"Do we want this or not? Of course, not. That is exactly why we put forward proposals for a process of negotiations," Putin said in response to a question on whether Russia wanted a war in Europe.
Putin has demanded the U.S. and its allies provide guarantees that Ukraine won’t be allowed to join the NATO military alliance, which he has flagged as a threat to Russia.
U.S. President Biden said, however, that a Russian attack on Ukraine was still very much a possibility, and reiterated that neither the U.S. nor NATO were a threat to Russia.
"The United States and NATO are not a threat to Russia, " Biden said. "Neither the US nor NATO have missiles in Ukraine. We do not do not have plans to put them there as well."
Easing Russia-Ukraine tensions restored investor risk appetite, with tech, in particular chips stocks, in high demand.
The iShares Semiconductor ETF (NASDAQ:SOXX) jumped more than 5%, led by 9% rally in the NVIDIA (NASDAQ:NVDA) ahead of its quarterly results due Wednesday.
The chipmaker’s gaming and data center businesses are expected to help it deliver “a significant beat and raise,” Piper Sandler said in a note, according to Barons
Big tech including Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL), and Meta Platforms (NASDAQ:FB) were also in the ascendency.
Facebook agreed to pay $90 million to settle a years-long privacy lawsuit that alleged the social media giant kept tabs on users' internet activity even after they logged out their social media accounts.
Energy stocks, meanwhile, ended in the red, pressured by a plunge in oil prices on deescalating geopolitical tensions.
Occidental Petroleum (NYSE:OXY), Marathon Oil (NYSE:MRO), and Diamondback Energy (NASDAQ:FANG) led the declines in the sector.
The return of risk-on sentiment to Wall Street prompted investors to sell U.S. Treasuries, sending yields higher just as data showed further signs of inflation pressures.
The producer price index rose by a more than expected 1.0% in January, following a 0.3% gain in December. The year-on-year pace of producer prices rose 9.7% in January, the largest gain on records dating back to 2010.
The inflation report arrives a day ahead of the Federal Reserve’s minutes for the January meeting that could provide insights into the central bank’s thinking on tightening monetary policy.
The odds of a 50% rate hike at the Fed’s meeting next stood at about 61% versus 27.9% a week ago, according to Investing.com’s Fed Rate Monitor Tool.
In other news, Virgin Galactic (NYSE:SPCE) jumped 32% on signs of increased commercial activity after the space tourism company said it would start selling tickets to the public on Feb. 16.