The Dow gained more than six-tenths of a percent, the S&P added half a percent and the Nasdaq climbed two-tenths of a percent.

Data from the Commerce Department showed the economy grew faster than expected in the fourth quarter amid strong consumer spending - confounding predictions of a recession after the Federal Reserve aggressively raised interest rates.

Full-year growth, at 2.5%, also blew past estimates.

"I think the question that remains is: Can consumers keep going?"

Rob Haworth is Senior Investment Strategy Director at US Bank Asset Management.

"I think for now the answer is probably yes. The economy is going to keep doing OK and avoid recession. And we're going to clearly watch retail sales data. We're going to watch income data. Next week's jobs report will be important to us in terms of, Is the labor market faltering at all? But I think it's hard to say that the economy is going to accelerate from here, and I'm not sure there's evidence yet that there's enough wrong that the economy is going to significantly decelerate from here. We do seem to be in a really good spot for the next couple of quarters."

In a less good spot: Tesla's valuation. Shares slumped 12% to their lowest level since May 2023, wiping away roughly $580 billion in market value. The nosedive came after CEO Elon Musk warned sales growth would slow this year despite price cuts that have hurt the EV maker's margins.

Shares of Humana sank more than 11.5% after it became the latest health insurer to forecast disappointing annual profits. Peers UnitedHealth and Cigna also dropped.

Shares of IBM jumped 9.5% after the company forecast full-year revenue growth above estimates.

And shares of American Airlines soared more than 10% after the carrier forecast largely upbeat annual profits.