By Devik Jain and Sabahatjahan Contractor

(Reuters) -U.S. stock indexes rallied more than 1% on Wednesday as Federal Reserve Chair Jerome Powell signaled the central bank would start raising rates this month, although at a steady pace in the wake of the ongoing Ukraine crisis.

Powell’s comments, at a testimony to the U.S. House of Representatives Financial Services Committee, appeared to calm some nerves after Russia’s invasion of Ukraine sent markets into a tailspin in the last few days.

Powell said he is inclined to support a 25 basis point rate hike in March, quelling some concerns about an aggressive 50 basis point rate hike, odds of which had largely unwound since the Ukraine crisis deepened.

“You’re bringing some levels of certainty to the market. It also kind of helps the market assess the seriousness of the war and what the real counter risks may have been,” said Eric Schiffer, chief executive officer of California-based private equity firm Patriarch Organization.

“And if the Fed felt that those risks were stronger, there would be a question of whether they would raise at all.”

Traders now see a 5% probability of a 50 basis point rate hike by the Fed at its March meeting and 95% probability of 25 basis point hike. [IRPR]

All the 11 major S&P sectors advanced, with financials rebounding 2.7% after falling sharply so far this week. The banks index climbed 3.1%, after hitting its lowest level since September 2021 in the previous session.

Energy shares resumed their march higher, up 2% as Brent crude jumped to near eight-year highs after Western sanctions disrupted transport of commodities exported by Russia.

Wall Street indexes had a rocky start to the week with financial stocks bearing much of the damage as investors weighed the impact of harsh sanctions against Russia.

Ukrainians said on Wednesday they were battling on in the port of Kherson, the first sizeable city Russia claimed to have seized, as air strikes and bombardment caused devastation in cities that Moscow’s bogged down forces have failed to capture.

At 11:41 a.m. ET, the Dow Jones Industrial Average was up 573.23 points, or 1.72%, at 33,868.18.

The S&P 500 was up 74.28 points, or 1.72%, at 4,380.54, and the Nasdaq Composite was up 165.77 points, or 1.22%, at 13,698.23 on boost from shares of Apple Inc, Microsoft Corp and Nvidia Corp which gained between 1% and 2.2%.

Data showed U.S. private employers hired more workers than expected in February as the labor market recovery gathered steam.

Among other stocks, Nordstrom Inc surged 37.4% after the department store chain forecast upbeat full-year revenue and profit.

Advancing issues outnumbered decliners by a 2.51-to-1 ratio on the NYSE and by a 1.82-to-1 ratio on the Nasdaq.

The S&P index recorded 20 new 52-week highs and 2 new lows, while the Nasdaq recorded 31 new highs and 96 new lows.

(Reporting by Devik Jain, Bansari Mayur Kamdar and Sabahatjahan Contractor in Bengaluru; Editing by Saumyadeb Chakrabarty)