Ten of the 11 major S&P sectors advanced in early trading, with nine of them up more than 1%. Leading the pack were consumer discretionary and financials, which rose 1.6% and 1.7%, respectively.
The energy sector was the lone decliner, dropping 0.5%.
Market heavyweights Apple Inc, Meta Platforms , Alphabet Inc, Microsoft Corp and Amazon.com Inc added between 1.3% and 2.5%.
Traders are almost fully pricing in a 75 basis point hike from the Fed, up from 8.2% a week ago, according to CME's FedWatch Tool. Such a big hike would lift the Fed's short-term target policy rate to a range of 1.5% and 1.75%.
The central bank will release its statement at 2 p.m. ET (1800 GMT), with a press briefing by Fed Chair Jerome Powell expected at 2:30 p.m. ET.
"The Fed is going to go 75 basis points and attempt to talk very hawkish to try to regain control of the narrative, and when it's all over, investors will breathe a sigh of relief," said Zach Hill, head of portfolio strategy at Horizon Investments.
"But the medium-term (market) outlook is the Fed wanting to tighten financial conditions and so that means lower equity valuations."
Worries about surging inflation, higher borrowing costs and rising challenges to economic growth have walloped global equities this year.
The benchmark S&P 500 index on Monday marked a more than 20% decline from its record closing high on Jan. 3, confirming it has been in a bear market, according to a commonly used definition.
Data showed U.S. retail sales unexpectedly fell 0.3% in May as motor vehicle purchases declined amid shortages, and record high gasoline prices pulled spending away from other goods.
Economists polled by Reuters had forecast retail sales gaining 0.2% last month.
At 9:44 a.m. ET, the Dow Jones Industrial Average was up 315.84 points, or 1.04%, at 30,680.67, the S&P 500 was up 48.12 points, or 1.29%, at 3,783.60, and the Nasdaq Composite was up 179.38 points, or 1.66%, at 11,007.73.
Goldman Sachs rose 2.4% to lead gains among the big banks.
Nucor Corp jumped 4.6% after it forecast upbeat current-quarter profit on strong steel demand.
Boeing Co surged 4.7% after China Southern Airlines Co Ltd this week conducted test flights with a 737 MAX plane for the first time since March, in a sign the jet's return in China could be nearing as demand rebounds.
Advancing issues outnumbered decliners by a 5.79-to-1 ratio on the NYSE and by a 3.81-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week highs and 30 new lows, while the Nasdaq recorded seven new highs and 77 new lows.
This story has been published from a wire agency feed without modifications to the text.
