Equities trading was choppy on Wednesday after the Fed signaled it could follow its June pause with two more rate increases this year.
But by Thursday afternoon the S&P 500 .SPX and the Nasdaq had rallied to 14-month highs on upbeat economic data.
Higher jobless claims helped fuel bets that the Fed would not follow through with more rate hikes.
"It's almost like a sweet spot," Tunkel said, also pointing to Chinese data boosting energy stocks and oil prices.
Gold prices rose from a three-month low as the dollar and bond yields fell after U.S. economic data, although worries over more Fed rate hikes capped gains.
Persons:
Irene Tunkel, Tunkel, Brendan McDermid, Sterling, Brent, Sinéad Carew, Marc Jones, Tom Westbrook, Mark Potter, Alexander Smith, Richard Chang
Organizations:
LONDON, European Central Bank, Federal Reserve, Nasdaq, BCA Research, Dow Jones, New York Stock Exchange, REUTERS, Treasury, Reuters, Thomson
Locations:
U.S, New York City, China, New York, London, Singapore