Dow rises about 300 points as investors weigh the Fed, better-than-expected GDP

U.S. stocks rose Thursday as investors mulled over a better-than-expected fourth-quarter GDP report and an update from the Federal Reserve on its rate hike plan.

The Dow Jones Industrial Average added about 300 points, or 0.9%. The S&P 500 rose 1%. The Nasdaq Composite added 0.9%.

Fourth-quarter gross domestic product jumped 6.9% from the year prior, the Bureau of Economic Analysis reported Thursday. Economists surveyed by Dow Jones expected the economy grew at a 5.5% annualized pace in the final three months of 2021.

"The Q4 GDP report was a nice upside surprise in a string of recently underwhelming economic data points," Mike Reynolds, vice president of investment strategy at Glenmede, said in a note.

Netflix jumped more than 5.5% on news that Pershing's Bill Ackman bought 3.1 million shares.

On the downside, McDonald's shares dipped 1.2% after the fast-food chain's fourth-quarter earnings missed Wall Street expectations. Intel lost 4.5% and Tesla fell 2.2% despite a strong earnings report.

Thursday's market action comes after the Federal Open Market Committee strongly indicated the first interest rate hike since late 2018 could come as soon as March.

Chairman Jerome Powell rattled markets Wednesday saying the Fed has "quite a bit of room" to raise rates before negatively impacting employment.

"Yesterday's FOMC decision and Powell's presser was both positive and negative for markets, but in the end, it mostly reinforced what we know: The Fed is serious about raising rates, that's going to continue to ... keep markets volatile," Tom Essaye, founder of Sevens Report, said in a note.