Wall Street surged on Thursday in a broad rally as a raft of solid retail earnings and soft economic data eased lingering concerns that the Federal Reserve's aggressive policy tightening would extend beyond expectations.

All three major U.S. stock indexes were sharply higher, with economically sensitive consumer discretionary and microchip stocks beating the broader market.

On a weekly basis, the S&P 500, Nasdaq and Dow are on track to snap their longest losing streaks in decades, and at current levels are poised to notch their biggest weekly gains since mid-March.

"We're having a good rally," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. "What happens today probably sets the stage for the indexes snapping a streak of weekly negativity."

Upbeat guidance from retailers appeared to offset dour warnings from their peers in recent weeks.

Department store operator Macy's Inc jumped 19.1% after raising its annual profit forecast.

Discount chains Dollar General Corp and Dollar Tree advanced by 14.4% and 20.4%, respectively, following their annual sales forecast hikes, suggesting consumers are shopping for less costly goods amid decades-high inflation.

The minutes from the Federal Open Market Committee's (FOMC) most recent monetary policy meeting calmed fears that the U.S. central bank could turn more hawkish, a concern which has fed into market volatility in recent weeks.

"The market agrees that we’re seeing an aggressive Fed, but not an ultra-aggressive Fed at this time," Cardillo said.

"Structural inflation has peaked, but transitory? Probably not," Cardillo added. "That would be a key for the Fed, and that could happen."

"The Fed turning dovish in the fall is a good possibility."

Economic data released on Thursday, including jobless claims, pending home sales and GDP, brought good news wrapped in bad, suggesting the economy is showing just enough softness to prompt a dovish pivot from the Fed by autumn.

The Dow Jones Industrial Average rose 572.54 points, or 1.78%, to 32,692.82; the S&P 500 gained 85.54 points, or 2.15%, to 4,064.27; and the Nasdaq Composite added 328.13 points, or 2.87%, to 11,762.87.

All 11 major sectors of the S&P 500 were up, with consumer discretionary stocks leading in percentage gains, surging by 5.1%.

Shares of Twitter Inc jumped 5.5% on news that the social media company is suing billionaire Elon Musk for delayed disclosure of his stake in the company.

U.S.-listed shares of Alibaba Group rose 14.9% after the Chinese e-commerce company beat estimates, even as it declined to provide forward guidance in view of COVID-19 restrictions in China.

Advancing issues outnumbered declining ones on the NYSE by a 6.23-to-1 ratio; on Nasdaq, a 3.59-to-1 ratio favored advancers.

The S&P 500 posted three new 52-week highs and 29 new lows; the Nasdaq Composite recorded 24 new highs and 93 new lows.