The CNN Money Fear and Greed index showed some improvement in the overall market sentiment, with the index moving to the "Extreme Greed" zone on Thursday.

U.S. stocks closed higher on Thursday, with the S&P 500 surging to a record high level during the session.

Addressing the Senate Banking Committee, Fed Chair Jerome Powell indicated that the Fed is not too far from being confident enough to cut rates, suggesting a growing inclination among policymakers to initiate easing policy this year.

Kroger Company ( KR ) reported better-than-expected earnings for its fourth quarter. BJ's Wholesale Club Holdings Inc reported downbeat sales for its fourth quarter.

On the economic data front, U.S. initial jobless claims came in unchanged at 217,000 in the latest week, higher than market estimates of 215,000. The U.S. reported a trade gap of $67.4 billion in January compared to revised $63.5 billion gap in the prior month.

Most sectors on the S&P 500 closed on a positive note, with information technology, communication services, and materials stocks recording the biggest gains on Thursday. However, financial and real estate stocks bucked the overall market trend, closing the session lower.

The Dow Jones closed higher by over 130 points to 38,791.35 on Thursday. The S&P 500 rose 1.03% at 5,157.36, while the Nasdaq Composite rose 1.51% at 16,273.38 during Thursday's session.

Investors are awaiting earnings results from Algonquin Power & Utilities Corp. ( AQNB ) , America's Car-Mart, Inc. and Genesco Inc. ( GCO ) today.

At a current reading of 75, the index moved to the "Extreme Greed" zone on Thursday, versus a prior reading of 74.

What is CNN Business Fear & Greed Index?

The Fear & Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.

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