U.S. stock futures rallied early Tuesday, as appetite for riskier investments resurfaced after a report Russian President Vladimir Putin has ordered troops back to base following the completion of military exercises.
A lack of economic data meant it was likely to be another session spent closely watching the news ticker. Richmond Fed President Jeffrey Lacker is due to speak in a one-on-one interview on the economy in New York at 4:15 p.m.
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In a reversal of what was seen in the early hours of Monday, futures for the S&P 500 index jumped 20.3 points, or 1.1%, to 1,863.40, while those for the Dow Jones Industrial Average rose 173 points, or 1%, to 16,320. Futures for the Nasdaq-100 index rallied 45.45 points, or 1.2%, to 3,713.75.
Media reports said Tuesday Russian troops sent on surprise military exercises that began last Wednesday, some of which are near the border of Ukraine, have been ordered to return to their bases by March 7. International observers had become nervous over the exercises in central and western Russia because, as The Wall Street Journal said, they have been used in the past as a cover for military action.
There were no reports of any movement of Russian troops within Crimea. The Wall Street Journal said some Ukrainian troops had been issued ultimatums to hand in their weapons and defect to the Russian military. The ultimatum deadlines passed without incident, and Russia's military denied issuing threats.
Markets added to gains as Putin spoke to reporters. The Russian leader said his government was worried about radical extremists in Kiev and would use military force in Ukraine only in an extreme case.
Rebecca O'Keeffe, head of investment at stockbroker Interactive Investor, said while the brinkmanship may look a bit less fraught, potential further escalation remains and volatility will stay high as markets react to both news and rumors.
"This increased volatility has impacted almost all areas of the market, from equities to bonds and commodities. While it has undoubtedly created a number of buying opportunities, with the political, economic and energy risks so high, investors will need to be careful," O'Keeffe said in a note.
Wall Street stocks suffered their worst selloff in a month on Monday, with the S&P 500 index ending the day off 14.02 points, or 0.8% lower, at 1,845.43, after closing at a record on Friday. The S&P 500 also erased its year-to-date gains.
There is no data for Tuesday outside of the CoreLogic home price index for January, due at 8 a.m. EST.
Confirmation hearings for President Barack Obama's three Fed nominees--Stanley Fischer, Jerome Powell and Lael Brainard--have been postponed following government closures on Monday due to a snowstorm.
As stock futures rallied, gold and oil prices pulled back from highs seen in the prior session. Gold for April delivery (GCJ4) fell $12 to $1,338.10, and West Texas Intermediate crude fell 1.5% and Brent crude prices fell 1.6%.
Asian shares had a mixed session, though Hong Kong's Hang Seng Index, one of Asia's worst-hit markets on Monday, managed a gain of 0.4%, and Toyko also rose. Beaten-down European stocks were also on the rise, with the Stoxx Europe 600 index up 1.7%.