The CNN Money Fear and Greed index showed an increase in the overall market sentiment, but the index remained in the "Greed" zone on Thursday.

U.S. stocks closed higher on Thursday, with the Dow Jones index gaining more than 350 points during the session. On Wednesday, the US central bank maintained its benchmark fed funds rate range at 5.25%- 5.5%, while Fed chairman Jerome Powell indicated that the central bank is unlikely to cut rates in March.

On the economic data front, U.S. initial jobless claims increased to 224,000 in the week ending January 27, versus a revised 215,000 in the prior week, compared to market estimates of 212,000. The ISM manufacturing PMI rose to 49.1 in January, notching the highest level since Oct. 2022, compared to 47.1 in December and topping market estimates of 47.

Most sectors on the S&P 500 closed on a positive note, with consumer discretionary, consumer staples, and utilities stocks recording the biggest gains on Thursday. However, energy stocks bucked the overall market trend, closing the session slightly lower.

The Dow Jones closed higher by around 370 points to 38,519.84 on Thursday. The S&P 500 rose 1.25% at 4,906.19, while the Nasdaq Composite jumped 1.30% at 15,361.64 during Wednesday’s session.

At a current reading of 70, the index remained in the "Greed" zone on Thursday, versus a prior reading of 66.

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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