Wall Street's three main stock indexes rallied nearly 2% on Thursday on hopes that the U.S. Federal Reserve has reached the end of its interest rate hiking campaign and a batch of upbeat quarterly financial updates added to the bullish mood.

The Fed held interest rates steady on Wednesday as expected, and while Chair Jerome Powell left the door open to further tightening he also acknowledged the impact of a recent surge in bond yields on the economy.

The comments, viewed as hints that the central bank is done with its rate hikes, sent longer-dated U.S. Treasury yields tumbling, which supported stocks.

"Powell's comments in the presser yesterday were what everyone wanted to hear," said Justin Burgin, vice president of equity research at Ameriprise Financial in Troy, Michigan.

Burgin also pointed to better-than-expectated earnings reports. While the current-quarter guidance has been weaker than previously expected, Burgin said analysts are still forecasting growth.

"The fact the wheels didn't come of the bus for the fourth quarter is pretty good," he said.

According to the latest LSEG data, Wall Street is forecasting fourth-quarter earnings growth of 7.2%, down from 11% on Oct. 1, before the reporting season began. And for the third quarter, 80.9% of companies reporting so far have beat analysts' expectations while 14.9% have missed expectations.

The Dow Jones Industrial Average rose 564.5 points, or 1.7%, to 33,839.08, the S&P 500 gained 79.92 points, or 1.89%, at 4,317.78 and the Nasdaq Composite added 232.72 points, or 1.78%, at 13,294.19.

The S&P 500, in its fourth straight session of gains, boasted its biggest one-day percentage gain since April. Also the benchmark index closed above its 200-day moving average for the first time since Oct. 24.

The small cap Russell 2000 index finished up 2.7% for its biggest one-day percentage gain since June 6.

The Nasdaq in its fifth consecutive day of gains, registered its biggest one-day percentage increase since July 28.

After stocks tumbled in October, "the set-up was well primed for a bit of a relief rally," said Emily Leveille, portfolio manager at Thornburg Investment Management in Santa Fe, New Mexico.

All 11 major S&P 500 sectors rose, led by energy and rate-sensitive real estate with gains of more than 3% each. The communications services sector rose least, adding 0.9%, followed by consumer staples which gained 1.3%.

Among individual stocks, Starbucks rallied 9.5% after the coffeehouse company's fourth-quarter results beat estimates. Also Qualcomm shares climbed 5.8% after the chip designer forecast first-quarter sales and profit above estimates.

PayPal shares jumped 6.6% as the payments giant raised its full-year adjusted profit forecast. Apple shares closed up 2% ahead of its quarterly report, which is due later on Thursday.

Other big stock movers included Moderna, which sold off after lowering its 2023 COVID-19 vaccine sales forecast.

Data released earlier in the day showed the number of Americans filing new claims for unemployment benefits increased moderately last week.

This week's key economic data release will be the October non-farm payrolls report due on Friday.

Advancing issues outnumbered decliners on the NYSE by a 7.30-to-1 ratio; on Nasdaq, a 3.16-to-1 ratio favored advancers.

The S&P 500 posted 10 new 52-week highs and nine new lows; the Nasdaq Composite recorded 40 new highs and 140 new lows.

On U.S. exchanges, 11.96 billion shares changed hands compared with the 10.78 billion average for the last 20 sessions. (Reporting by Sinéad Carew in New York, Amruta Khandekar and Shashwat Chauhan in Bengaluru; Editing by Savio D'Souza, Shounak Dasgupta, Saumyadeb Chakrabarty, Maju Samuel and Richard Chang)