The Nasdaq and S&P 500 ended solidly higher Thursday after touching roughly five-month intraday highs as a more dovish-than-expected message from Federal Reserve Chair Jerome Powell boosted equities and Meta Platforms shares soared on rigorous cost controls.

Nasdaq jumped 3.25%, 385 points, while the S&P 500 was up 1.47%.

Declines in some big healthcare stocks weighed on the Dow, which ticked down by 0.11%.

Shares of megacap stocks Apple, Amazon and Google parent Alphabet also gained strongly ahead of their results due after market close.

Investors were still digesting the Fed's policy decision on Wednesday and comments from Powell, who acknowledged progress in the fight against inflation and appeared reluctant to push back against the rally in stocks and bonds.

“I think the reaction to yesterday’s Fed comments really encouraged investors to go risk on,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey. "The bottom line for investors I think is that the Fed’s comments were unexpected.”

After a bruising 2022, U.S. stock markets have made a strong start to the year, with tech and other stocks that lagged last year leading the rebound amid hopes that the Fed will temper its aggressive rate hikes, which in turn could alleviate some pressure on equity valuations.

Those trends continued on Thursday. The communications services sector jumped, led by a surge for Facebook parent Meta. The company revealed stricter cost controls this year and a $40 billion share buyback, as CEO Mark Zuckerberg called 2023 the "year of efficiency."

“I think that encapsulates what investors want to hear from tech companies this year," said Anthony Saglimbene, chief market strategist at Ameriprise Financial. "They want to hear that it is a year of efficiency, they are getting out ahead of a slowdown in the economy."

UnitedHealth Group shares fell after the U.S. government proposed Medicare Advantage reimbursement rates below analyst estimates, and the stock weighed down the Dow. A decline in Merck shares, after the drugmaker forecast 2023 earnings below Wall Street estimates, also dragged on the blue chip index.

Shares of drugmaker Eli Lilly dropped after sales of its closely watched diabetes drug missed estimates.

Data showed jobless claims fell last week to a nine-month low, highlighting the labor market's resilience, ahead of monthly U.S. employment numbers on Friday.