The Dow Jones Industrial Average rallied the most in over a month as traders cheered the revival of Wall Street's IPO market and a decent batch of economic data.
The Dow was up for the first day in three, climbing 331.58 points, or 0.96% to 34,907.11. The 30-stock index closed above its 50-day moving average for the first time since Sept. 1. It was also the blue-chip average's best day since Aug. 7.
The S&P 500 gained about 0.84% to 4,505.10, while the Nasdaq Composite moved 0.81% higher to 13,926.05.
Arm shares surged 24.7% after the chip design company started trading Thursday. Investors hope the biggest tech offering of the year could kickstart a sleepy IPO market. Arm's initial public offering was priced at $51 a share Wednesday. In its first day, it closed at $63.59 a share.
"The successful IPO of Arm certainly helps confidence," said Art Hogan, chief market strategist at B. Riley Financial.
"It's not the biggest deal we've ever seen, and it certainly was priced well and it's holding up well. So, getting that behind us sort of instills some confidence that perhaps the capital markets window is going to open again after virtually being closed for the last 18 months," Hogan added.
In addition, investors digested a raft of economic reports pointing to tamer core inflation data and a resilient consumer.
August's producer price index showed core PPI was held in check last month. Core PPI, which excludes food and energy, increased 0.2%, in line with what was anticipated by economists polled by Dow Jones. However, the headline number rose 0.7%, more than the expected 0.4% increase.
That comes after August's consumer price index on Wednesday showed core CPI, which excludes food and energy, came in slightly above expectations on a monthly basis.
August retail sales came in better than expected, jumping 0.6% against a 0.1% increase expected by economists. Excluding autos, retail sales rose 0.6% last month, more than the forecasted 0.4% increase.
"I think you've got the perfect framework of inflation heading in the right direction, but the economy not falling apart," Hogan said. "And that really paints the picture that the Fed has done the right thing and we may well be orchestrating that elusive soft landing. At least that's the impression we get this week."
While the Federal Reserve is expected to stay on hold at its September policy meeting, the European Central Bank on Thursday hiked rates by an expected quarter percentage point. However, the ECB noted inflation is easing and hinted it could be near the end of its rate-hiking campaign.
In the U.S., Fed funds futures pricing data shows a 97% likelihood of rates remaining unchanged next week, according to the CME FedWatch Tool.
Elsewhere, Adobe is expected to post quarterly results after the market close Thursday.
