US stocks stage blazing comeback, finish in positive territory after Dow sell-off that reached 1,115 points

• The S&P 500 ended off session lows on Monday after falling into a correction.
• Russia tensions and Fed rate-hike fears have driven stocks lower.

US stocks ended higher Monday after suffering staggering losses earlier in the session, with investors staging a rally after early concerns around the Federal Reserve's policy meeting set to kick off on Tuesday.

The S&P 500 dropped briefly into a correction, down more than 10% from its all-time high, but ended higher almost 0.3%. The Dow Jones Industrial Average at one point fell by more than 1,000 and the Nasdaq Composite had logged a 4% loss

"Investors may have gotten a bit too pessimistic about the growth outlook," said Ed Moya, senior market analyst at Oanda, in a note.

According to Moya, investors may have been reacting to the prospect that the Fed hikes by 50 basis points at its March meeting, higher than the 25 basis points most have been anticipating.

"The Fed is scrambling to control inflation and markets have gone from expecting a gradual interest rate hiking cycle to an accelerated tightening action until inflation eases," Moya said.

Here's where US indexes stood at 4:00 p.m. on Monday:

• S&P 500: 4,410.13, up 0.28%

• Dow Jones Industrial Average: 34,364.50, up 0.29% (99.13 points)
• Nasdaq Composite: 13,855.13, up 0.63%

On Wednesday, the Fed will release its first policy decision of the year. With inflation near 40-year highs, the central bank is set to ramp up interest rates soon and draw back further on its emergency monetary response to the pandemic.

Traders expect the Fed to increase rates four times this year, starting in March with a 25-basis-point increase, but some analysts believe policymakers could move even more quickly. Goldman Sachs economists said the Fed may hike rates at every meeting from March on — or seven increases in total.

"Investors are accepting the harsh reality that the end of the ultra easy monetary policy is upon us. This week the Federal Reserve meets and while we expect no changes at this meeting, the market is pricing in a full quarter point increase in March," said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors, in a note Monday.

The next wave of big tech earnings is on deck, with Microsoft, Tesla, and Apple set to report this week.

Also pressuring stocks in Monday's session was news from the Pentagon that 8,500 US troops were ready to deploy if Russia staged an invasion in Ukraine. Russia has denied its planning military action against Ukraine even as its amassed tens of thousands of troops near Ukraine's border.

Around the market, Kohl's shares soared after the retailer received a takeover bid from private equity firm Sycamore Partners, marking the second reported buyout offer in a week.

Oil prices were mixed. West Texas Intermediate crude dropped 1.9% to $83.49 per barrel. Brent crude, the international benchmark, turned higher, up 0.4% at $86.57.

Gold edged up 0.4% to $1,838.50 per ounce. The 10-year yield fell 1 basis point to 1.752%.

Bitcoin turned higher, 0.2% to $36,375.14.