Wall Street surges as Ukraine fears ease

United States have closed sharply higher after an upbeat session that was buoyed by comments from Russian President Vladimir Putin that led investors to look beyond the political crisis in Ukraine.

With the threat of war seemingly fading, major European markets rose significantly, while Wall Street climbed high enough for two new records to be set.

The gains saw Monday's losses completely wiped out.

At the closing bell, the Dow Jones Industrial Average rose 226.70 points, or 1.40 per cent, to 16,394.73, which is just 1% shy of its all-time peak.

Meanwhile, the S&P 500 rose 28.07 points, or 1.52%, to chalk up a fresh record closing high of 1,873.80. The previous closing high was 1,859.45.

During the session, the index hit a fresh intraday high of 1,874.46.

The Nasdaq also surged, adding 74.67 points, or 1.75%, to 4,351.97. It hit a 14-year high of 4,356.31 earlier in the trading day.

There was little in the way of economic data out in the US, with investors eagerly awaiting jobs numbers later in the week.

Investors did, however, cheer news from President Barack Obama that the deficit would be at pre-crisis levels by 2018. The latest economic update from the White House also showed high growth hopes for the US economy.

In Europe, the latest producer price index showed inflationary pressures were worryingly light, with fears stoked on the threat of deflation. Investors, however, looked beyond this on comments from Russian President Vladimir Putin that force was a "last resort" in Ukraine.

"We're not sure how one says "phew" in Russian, yet that is a collective exclamation at this juncture," Briefing.com analyst Patrick O'Hare said.

"The US stock market, therefore, is free to return to its normal course of chasing new record highs, secure in the thought that yet another worst-case scenario seems to have been averted, that monetary policy is still accommodative, and that everything will look better than today six months from now."