By Kanchana Chakravarty and Nikhil Sharma

(Reuters) -U.S. stock index futures rose on Tuesday as President Donald Trump announced a ceasefire between Israel and Iran, calming investor nerves after the 12-day conflict hurt global risk assets and fanned inflation concerns.

Investors are also awaiting Federal Reserve Chair Jerome Powell's congressional testimony later in the day for clues on the near-term path for interest rates, as inflation is expected to accelerate in the coming months.

Trump's ceasefire announcement sent oil prices to a two-week low as supply concerns triggered by the Middle East conflict eased. U.S. energy stocks dipped in tandem before the bell, with Chevron and Exxon down about 1% each.

Defense stocks Lockheed Martin and RTX Corp fell 1.5% and 1.4%, respectively.

Trump's call for a truce marked a sharp turnaround after the U.S. bombed Iranian nuclear sites over the weekend and Iran retaliated by firing missiles at a U.S. base in Qatar.

Hours after the ceasefire declaration, however, Israeli Defence Minister Israel Katz said Iranian missiles were fired in violation of the agreement and he had ordered the military to strike Tehran in response. Trump accused both countries of violating the ceasefire.

"Stocks remain significantly bullish considering everything else that's going on," said Daniela Hathorn, senior market analyst at Capital.com.

"Markets just don't think that this is going to be bad enough to escalate into wider regional conflict or lead to any impact on economies or global markets."

At 07:43 a.m. ET, Dow E-minis were up 265 points, or 0.62%, S&P 500 E-minis were up 46 points, or 0.76%, and Nasdaq 100 E-minis were up 220.75 points, or 1%.

The benchmark S&P 500 index remains about 2% below its all-time highs.

Powell's congressional testimony is scheduled at 10:00 a.m. ET.

The top Fed policymaker has been on the receiving end of Trump's criticisms for not cutting interest rates, with the President hinting at firing Powell or naming a successor soon.

Atlanta Fed President Raphael Bostic told Reuters the central bank doesn't need to cut interest rates soon, as companies plan to raise prices due to higher import taxes and the job market is still strong.

In contrast, Fed Vice Chair Michelle Bowman on Monday backed the resumption of the policy easing cycle in July.

Market participants are pricing in at least two 25-basis point rate reductions before year-end, with the first cut seen in September.

Several central bank officials, including Fed Board Governor Michael Barr and Fed Minneapolis President Neel Kashkari, are also scheduled to speak later in the day.