The Dow Jones Industrial Average opened higher on Wednesday for the first time in five days and returned to positive territory for the year as a selloff in the equities market took a breather.
U.S. stocks ended flat on Tuesday, after three days of decline as financial and consumer staples shares bounced.
Applications for U.S. home mortgages rose last week, while interest rates hit their highest level since November 2014, data released on Wednesday showed.
The Nasdaq Composite snapped a four-day losing streak, rising the most in a month, and the S&P was positive for the second day in a row.
Investors are looking for more clarity on the timing of the first rate hike since 2006 by the U.S. Federal Reserve as economic data point to a recovering U.S. economy, which had come to a standstill in the first quarter.
"The market will drift for a while as clients look for fresh new investment ideas and wait for the next quarterly earnings season," said Brian Fenske, head of sales trading at ITG in New York.
"The big story is still the rate hike and how the world will react when it is eventually announced."
European shares also snapped a six-day losing streak, with German equities rebounding from their lowest level since February as traders said the recent selloff had gone too far.
U.S. bond prices slipped as they were hit by this week's flood of supply, sending the 10-year U.S. benchmark bond yield to an eight-month high of 2.458 percent.
The U.S. dollar index .DXY hit a three-week low, with analysts pointing to debate around the G7 summit regarding the speed of the dollar's rise as the U.S. prepares to end years of cheap central-bank cash.
At 10:04 a.m. ET the Dow Jones industrial average .DJI was up 141.3 points, or 0.8 percent, at 17,905.34, the S&P 500 .SPX was up 14.32 points, or 0.69 percent, at 2,094.47 and the Nasdaq Composite .IXIC was up 27.19 points, or 0.54 percent, at 5,041.05.
All the 10 major S&P 500 sectors were higher, with the energy index .SPNY, leading the gainers with a 1.33 percent rise. Infotech and utilities stocks also staged a strong recovery after being down in recent days.
Netflix (NFLX.O) was up 4.1 percent at $673.5 - a new life-high - a day after shareholders approved a massive increase in the number of shares the company is authorized to issue, the first step toward a possible stock split.
Francesca's Holdings (FRAN.O) slumped 13.2 percent to $13.91 after the women's apparel and accessories retailer reported lower-than-expected quarterly sales and forecast second-quarter profit and sales below analysts' estimates.
Advancing issues outnumbered decliners on the NYSE by 2,179 to 614. On the Nasdaq, 1,729 issues rose and 663 fell.
Seventeen stocks on the S&P 500 index hit a 52-week high and two a 52-week low. TheNasdaq recorded 90 highs and 14 lows.
(Reporting by Tanya Agrawal; Editing by Saumyadeb Chakrabarty)