Wall Street ended sharply higher on Tuesday, as signs of de-escalating tensions along the Russia-Ukraine border sparked a risk-on session.

All three major indexes notched solid advances on the day, with market leading tech and tech-adjacent stocks providing the biggest boost and putting the Nasdaq, which gained 2.5 percent, out front.

The Philadelphia SE Semiconductor index jumped 5.5 percent in its largest one-day percentage gain since March 2021.

Geopolitical heat was turned down a notch after Russia said it had withdrawn some of its troops near the Ukraine border, prompting bullish equities sentiment and causing crude prices to slide on easing supply concerns.

The announcement received guarded responses with the United States and NATO saying they had yet to see evidence of a draw-down.

Stocks briefly pared gains late in the session, when U.S. President Joe Biden said that while diplomatic efforts were ongoing.

"Nice rally today, thanks to [Russian President Vladimir] Putin," said David Carter, managing director at Wealthspire Advisors in New York.

"Markets have been moving based on Putin or [Federal Reserve Chairman Jerome] Powell," Carter added. "Putin and his intentions with Ukraine and Powell and his intentions regarding interest rates."

The Chicago Board Options Exchange (CBOE) market volatility index backed down from a three-week high.

On the economic front, a report from the Labor Department showed producer prices surged in January at twice the expected rate, reinforcing economists' expectations that the Federal Reserve will take on stubbornly persistent inflation by aggressively hiking key interest rates.

"Inflation data suggests prices are rising, but markets already knew this," Carter said.

The market has now priced in better than even odds that the central bank will raise the Fed funds target rate by 50 basis points at its March monetary policy meeting.

"The market is now priced for a more aggressive Fed, and outside of geopolitics there's reduced uncertainty," said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky. "But the market is never certain so you always dealing probabilities."

The Dow Jones Industrial Average rose 422.67 points, or 1.22 percent, to 34,988.84. The S&P 500 gained 69.4 points, or 1.58 percent, to 4,471.07 and the Nasdaq Composite added 348.84 points, or 2.53 percent, to 14,139.76.

Nine of the 11 major sectors in the S&P 500 closed green, with tech shares enjoying the largest percentage gain, jumping 2.7 percent. Energy stocks, weighed by sliding crude prices, fell 1.4 percent.