Wall Street's main indexes have posted gains mainly lifted by financial institutions and healthcare companies as investors digested hawkish remarks from policymakers that cemented bets of a large interest rate hike later this month.
Indexes bounced back and forth in a choppy trading as concerns over Federal Reserve's next steps to tame a surging inflation remain.
"There's just a lot of uncertainty and I think people aren't going to really make up their minds for longer than five minutes or five seconds, you know, until there's a little bit more clarity or light at the end of the tunnel," said Grace Lee, an equity income senior portfolio manager at Boston-based Columbia Threadneedle Investments.
Money market traders see 86 per cent odds that the Fed will hike rates by 75 basis points at this month's meeting.
Both Bank of America and Barclays said they now expect a 75-basis points interest rate hike.
Before Barclays had said it could be a 50- or 75-basis point increase while Bank of America was betting on a 50-basis point rise.
Powell said the central bank is "strongly committed" to bringing inflation down and needs to keep going until it gets the job done.
Chicago Fed President Charles Evans joined his fellow policymakers in saying that reining in inflation is "job one".
Investors are also awaiting the US 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 September 20-21.
Worries over aggressive monetary tightening across the globe stalled equity markets on Thursday after the European Central Bank hiked interest rates by an unprecedented 75 basis points and signaled further hikes.
Meanwhile, data showed the number of people in the US filing new claims for unemployment benefits fell last week to a three-month low, underscoring the robustness of the labour market even as the Fed raises interest rates.
With increasing odds of another outsized rate hike, both the rate-sensitive S&P 500 bank index and the S&P 500 health rose.
The healthcare sector was boosted by news that Regeneron Pharmaceutical Inc's anti-blindness treatment Eylea was shown to work as well when given at a higher dose at a longer interval between injections.
The drug maker's shares jumped double digits.
"People are embracing safety. Healthcare is a very safe sector and it's still fairly cheap, the same way with the broader financial sector," Lee said.
On Wednesday, Wall Street's main indexes climbed the most in about a month as bond yields retreated after a recent surge that was driven by expectations of higher interest rates.
Still, the benchmark S&P 500 is down over 16 per cent year-to-date.
The S&P 500 gained 26.14 points, or 0.66 per cent, to end at 4,006.01 points, while the Nasdaq Composite gained 69.51 points, or 0.59 per cent, to 11,861.41 and the Dow Jones Industrial Average rose 187.87 points, or 0.59 per cent, to 31,769.15.
GameStop Corp surged after the video game retailer reported a smaller than expected quarterly loss.
American Eagle Outfitters Inc tumbled 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.