The US central bank reduced borrowing costs by a widely-expected quarter of a percentage point on Wednesday, but Fed Chairman Jerome Powell signaled a series of further cuts was unlikely, leading to a sharp selloff on the S&P 500 and Dow.

Despite that, all three major indexes posted their second straight monthly gains in July, closing the book on a month in which the S&P 500 and the Nasdaq reached fresh record highs.

"It was always going to be a tough job for the Fed to be as dovish as stock markets hoped. The 25 bps cut was a non-event," said Chris Beauchamp, chief market analyst at IG, in a note.

"With the Fed out of the way there is a chance that we can all get back to focusing on earnings and how earnings season continues to paint a broadly positive picture."

Almost three weeks through earnings, reports so far have been strong. Of the 296 companies in the S&P 500 that have reported second-quarter earnings, 74.7pc have beaten Street estimates for profit, according to Refinitiv data.

The S&P 500 technology sector, Wall Street's best performer so far this year, rose 1.12pc after a 1.5pc drop in the previous session.

Verizon Communications Inc rose 1.41pc, driving a 0.85pc gain in the communication services sector, after the wireless carrier beat quarterly profit estimates as it added far more net new phone subscribers who pay a monthly bill than expected.

The Dow Jones Industrial Average rose 96.27 points, or 0.36pc, to 26,960.54, the S&P 500 gained 14.11 points, or 0.47pc, to 2,994.49.

The Nasdaq Composite added 71.57 points, or 0.88pc, to 8,246.99.

Kellogg Co jumped 9.52pc after the company beat analysts' expectations for quarterly sales and profit, driven by higher demand for its snacks, including Pringles and Pop-Tarts, in North America.

But not all reports were upbeat.

Qualcomm Inc dropped 3.32pc after the chipmaker's quarterly revenue and profit forecast fell short of Wall Street targets.

Among other decliners, the energy sector slid 0.59pc, the most among the 11 major S&P sectors, as oil prices declined on Fed commentary on further rate cuts and as rising US output helped keep the market well supplied.

Shares of oil major Exxon Mobil Corp dropped 0.65pc, while Chevron Corp dipped 0.04pc. Both companies are due to report earnings on Friday.

Advancing issues outnumbered decliners by a 1.23-to-1 ratio on the NYSE and by a 1.94-to-1 ratio on the Nasdaq.

The S&P index recorded 13 new 52-week highs and five new lows, while the Nasdaq recorded 42 new highs and 44 new lows.