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Stocks jumped Wednesday as traders awaited the Federal Reserve's latest monetary policy decision and updated economic projections later in the day. More positive developments on the outlook for Russia-Ukraine talks also helped boost U.S. and global equities.

The S&P 500, Dow and Nasdaq each rose about 1% just after market open. The major indexes held gains even after a new report on retail sales showed a sharper than expected deceleration in consumer spending last month, with rising inflation beginning to curb some discretionary purchases. Treasury yields steadied after moving sharply higher, and the 10-year yield hovered above 2.1% for its highest level since 2019.

At least one Kremlin official reportedly struck an upbeat tone on discussions with Ukraine early Wednesday, helping provide a boost to stocks recently roiled by geopolitical turmoil. Kremlin spokesperson Dmitry Peskov suggested a proposal to have Ukraine become a neutral country while keeping its armed forces "could be viewed as a certain kind of compromise,"Bloomberg reported Wednesday.

Energy prices steadied after unwinding recent gains. West Texas intermediate (CL=F

Investors this week have been gearing up to receive the Federal Reserve's latest monetary policy decision, which is likely to show the first of multiple interest rate hikes this year. Currently, the benchmark interest rate has been kept near zero since mid-2020, with the central bank using low rates and a series of other monetary policy tools to keep financial conditions running smoothly amid the pandemic. The Fed last raised interest rates in 2018.

Already, Fed Chair Jerome Powell told Congress in recent weeks that he would back a 25 basis point interest rate hike at the Fed's March meeting. Such an increase would be in-line with the Fed's typical hike size per meeting over the past two decades, and would begin the process of tightening financial conditions to gradually bring down demand and inflation. And in opting against a more aggressive 50 basis point rate hike — which some market participants had called for at the beginning of the year — the Fed would also likely avoid delivering a shock to markets already reeling from Russia's invasion of Ukraine.

And importantly, in addition to offering a decision on raising rates, the Fed will also release an updated Summary of Economic Projections, or "dot plot," showing what central bank officials are thinking for where interest rates and growth in the economy may be headed in the near-term. And to that end, many pundits expect to see the Fed upgrade its outlooks on inflation and the labor market this year.

The core Personal Consumption Expenditures (PCE) — or the Fed's preferred inflation gauge excluding volatile food and energy prices — last rose at a 6.1% annual rate in January. And since then, more recent prints on consumer and producer price inflation have pointed to even steeper run-up in prices.

"The dot plot should increase given all the news that we've had between December and today," Michael Kushma, Morgan Stanley Investment Management chief investment officer, told Yahoo Finance Live on Tuesday. "We've got a strong labor market, higher than expected inflation. Oil prices, energy prices, commodity prices are much higher now then they were back then. All of it suggests that the Fed needs to get going, and that they need to up the dot plot. So I think they'll talk about the mean, maybe five rate hikes in 2022, and a couple more in 2023."