US stocks rallied on Thursday as investors weighed the Federal Reserve's more dovish-than-expected interest rate guidance on Wednesday against a plethora of mixed earnings and economic data.

All three indexes ended in positive territory. The tech-heavy Nasdaq led the way, advancing 1.5 percent with a healthy boost from chip stocks after Qualcomm reported quarterly sales and profit above analysts' expectations.

Markets continued to parse Fed Chair Jerome Powell's assurances on Wednesday that the central bank's next policy move will be to lower its key policy rate, after it left rates unchanged at the end of its monthly meeting. However, he noted that recent strong inflation readings have suggested that first of these rate cuts could be a long time in coming.

"The takeaway from yesterday is that the Fed's bias is still a downward, hold steady or cut rates," said Paul Nolte, senior wealth advisor and market strategist at Murphy & Silvest in Elmhurst, Illinois.

"They're not willing to raise rates from here. They'll keep rates steady, and any sign of economic weakness or lower inflation, they are going to be ready to jump on it and cut."

Data released on Thursday included muted jobless claims, a drop in planned layoffs, a surge in quarterly labour costs and a sharp deceleration in productivity, all of which throws focus on Friday's closely watched April employment report.

"The Fed has been consistent in saying they're going to be data dependent," said Joseph Sroka, chief investment officer at NovaPoint in Atlanta. "We went into this year thinking there could be more cuts, earlier. "The data hasn't supported that."

Among individual stocks, Qualcomm advanced 9.8 percent following its earnings beat. Shares of used car platform Carvana surged 33.8 percent on its upbeat profit forecast.

But disappointing profit guidance sent DoorDash's stock down 10.3 percent. Etsy shares slid 15.0 percent after the online marketplace missed Wall Street expectations for first-quarter gross merchandise sales and profit.

Peloton dropped 2.5 percent after the fitness equipment maker's CEO stepped down and the company announced a 15 percent cut to its global workforce.

The Dow Jones Industrial Average rose 0.85 percent, to 38,226. The S&P 500 gained 0.91 percent, at 5,064 and the Nasdaq Composite added 1.51 percent, at 15,841. (Reuters)