The Dow Jones Industrial Average rose Thursday, recovering from a brutal sell-off after the Federal Reserve held steady on rates but signaled that a March cut is unlikely.
The 30-stock Dow added 369.54 points, or 0.97% to close at 38,519.84. It was a fresh record close for the blue-chip index, which also wiped its losses from a day earlier. The S&P 500 added 1.25% to 4,906.19. The Nasdaq Composite gained 1.3% to finish the session at 15,361.64.
Earnings returned to the forefront with three of the so-called Magnificent Seven reporting results after the market close. Stock in iPhone maker Apple ticked up more than 1%, helping lift the broader S&P 500. Shares of e-commerce giant Amazon climbed 2.6%, while Facebook-parent Meta gained 1.2%.
Ahead of the market open, pharmaceutical company Merck turned in a fourth-quarter beat, which helped prop up the Dow, as its shares climbed more than 4%.
Wall Street is coming off a poor session. The Dow fell 317 points, or 0.8%, posting its worst day since December. The S&P 500 slid 1.6% on Wednesday in its worst day since September. The Nasdaq Composite lost 2.2%, its worst session since October.
Wednesday's declines came after Fed Chair Jerome Powell in his post-meeting conference discouraged investor hopes for a rate cut as soon as March, sending equities tumbling.
"I think the market has been getting ahead of itself, with pricing in many more rate cuts, because it will be associated with a much weaker economy if they were to cut as many times as the market is currently pricing," Apollo Global Management chief economist Torsten Slok told CNBC's "Squawk on the Street" Thursday.
Bond yields slumped further, with the 10-year Treasury reaching a one-month low. The benchmark was last 9 basis points lower at 3.87%.
Investors will now turn their attention to the first jobs report of the year due out Friday morning.