However, market gains capped in the wake of hawkish remarks from policymakers that cemented bets of a large interest rate hike later this month.
At the close of trade, the Dow Jones Industrial Average index advanced by 193.24 points, or 0.61%, to 31,774.52. The S&P500 index was up 26.31 points, or 0.66%, to 4,006.18. The tech-heavy Nasdaq Composite Index increased by 70.23 points, or 0.6%, to 11,862.13.
Federal Reserve Chair Jerome Powell said the U.S. central bank was "strongly committed" to controlling inflation. Powell also once again warned about the dangers of allowing elevated prices to become entrenched, noting the Fed has a "responsibility" to bring inflation back down to 2%.
Chicago Fed President Charles Evans also said on Thursday that getting high inflation down is "job one," and to do so the Fed could raise interest rates by another 75 basis points this month.
Investors are also awaiting the U.S. August inflation report next week for fresh clues on whether the Federal Reserve will hike rates by half or three-quarters of a percentage point at the next policy meeting due Sept. 20-21.
Biotechnology stocks turned in some of the market's best performances on the day. Substantial strength was also visible among banking stocks. Healthcare, semiconductor and brokerage stocks also saw notable strength on the day, while telecom and airline stocks moved to the downside.
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Among individual stocks, shares of GameStop Corp surged 7.4% after the video game retailer reported a smaller-than-expected quarterly loss.
Vaccine maker Moderna (MRNA) posted a strong gain after Deutsche Bank upgraded its rating on the company's stock to Buy from Hold.
American Eagle Outfitters Inc shares tumbled 8.7% after the apparel maker missed second-quarter profit estimates and said it would pause quarterly dividend as it fortifies its finances against a hit from inflation.
ECONOMIC NEWS: The Labor Department released a report unexpectedly showing initial jobless claims edged down to 222,000, a decrease of 6,000 from the previous week's revised level of 228,000.
Among Indian ADR, ICICI Bank added 2.8% to $23, Azure Power Global rose 8.9% to $5.29, WNS Holdings added 0.6% to $85.24, and Wipro was up 0.59% to $5.13. HDFC Bank added 1.8% to $64.40, and INFOSYS was up 0.5% at $18.53. Tata Motors fell 1.7% to $27.88 and Dr Reddy's Labs fell 0.1% to $53.35.
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