Stocks rise as investors await Federal Reserve update

U.S. stocks rose Wednesday as traders awaited the Federal Reserve's release of its policy meeting from earlier this month.

The Dow Jones Industrial Average jumped 171 points, or 0.3%, higher. The S&P 500 rose 0.6% and the Nasdaq Composite advanced 1%, after posting a steep loss in the previous session.

Investors are awaiting the latest meeting minutes from the Federal Open Market Committee, which are scheduled to be released at 2 p.m. ET. At the May 4 meeting, the Fed hiked rates by half a percentage point, with Chair Jerome Powell saying that inflation is "much too high and we understand the hardship it is causing. We're moving expeditiously to bring it back down."

"The Fed is committed to a near-term rate and quantitative tightening path, with a goal to soften demand and moderate inflation without inducing a recession," said Ross Mayfield, investment strategy analyst at Baird. "With market devoid of major catalysts, earnings reports and macro takeaways remain in focus, particularly retailers, which have sold off precipitously on cracks in consumer demand and rapid spending mix shift."

Nordstrom shares jumped more than 11% Wednesday after the retailer surpassed sales expectations and raised its full-year outlook. Retailers have been on an earnings spree since last week that has held the attention of investors anxious to see how companies are managing sky-high inflation.

Best Buy climbed 6% despite getting a downgrade from Barclays, which followed a mixed earnings report Tuesday in which the electronics retailer cut its yearly outlook. Dick's Sporting Goods gained 8% after topping earnings and revenue estimates for its fiscal first quarter.

Shares of Kohl's surged 15% following a report that bidders are still competing to acquire the retailer.

Investors and analysts have pointed out that the ongoing retail wreck reflects a shift in consumers' demand for services rather than goods, and some have suggested stocks may be getting overly punished for their results.

Elsewhere, Intuit jumped more than 5% after the tax software company reported better-than-expected quarterly profit and revenue, and raised its current quarter outlook. Tech stocks led market losses in the previous session, following a warning of slowing growth from social media company Snap.

Homebuilder Toll Brothers also posted quarterly results that beat analyst expectations, sending the stock up more than 3%. Lennar, D.R. Horton and Pultegroup were also among the S&P 500's top gainers Wednesday.

Traders will continue to parse through earnings reports this week to see how companies are handling inflationary pressures. Snowflake and Nvidia are set to post quarterly reports after the bell. Costco will report on Thursday.