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U.S. equity markets posted a big comeback rally on Tuesday as the chances of outright war in Eastern Europe dropped.
The Dow Jones Industrial Average soared 228 points, or 1.4%, to 16396, the S&P 500 jumped 28.2 points, or 1.5%, to 1874 and the Nasdaq Composite climbed 74.7 points, or 1.8%, to 4352.
Wall Street can be quick to forget. A day after war between Ukraine and Russia appeared imminent, the situation took a turn toward a more peaceful resolution. Russian President Vladimir Putin said the country doesn't intend on annexing Crimea -- the predominantly-Russian region in Southeast Ukraine. Putin also pulled his troops that were participating in a exercise on the Western side of the country back to base, helping deescalate tension.
Analysts said the moves helped reduce the chances of international sanctions against Russia, which could have weighed on multi-national businesses.
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At the same time, the international community began the process of crafting financial assistance for struggling Ukraine. The U.S. Treasury Department said early Tuesday it is assembling a $1 billion loan guarantee program.
The news sent the broad S&P 500 to a fresh all-time high.
Despite the relative calm, several traders warned the situation could still turn at any point.
"It's going to flare up," said Michael Block, chief strategist at Rhino Trading Partners. "Having lulled everyone back into complacency, Putin will now take any pretext to go back in to 'protect Russian interests.'"
Mirroring that sentiment to some extent, analysts at Societe Generale also issued a warning to clients.
"Investors will remain hostage in the near-term to the political news flow that comes out of the region but Russia's central bank decision to raise rates by [1.5%] and tweak its intervention mechanism has restored some stability," they said.
Elsewhere, U.S. crude oil futures slid $1.27, or 1.2%, to $103.65 a barrel. Wholesale New York Harbor gasoline jumped 1% to $2.79 a gallon. Gold slid $15.90, or 1.2%, to $1,334 a troy ounce.
In corporate news, Qualcomm (QCOM) boosted the size of its stock-buyback program by $5 billion and hiked its dividend.
The U.S. economic docket is bare on the day.