STORY: Wall Street rallied for a second day in a row on Thursday, despite data showing the U.S. economy shrank for a second straight quarter, as investors believed that might keep the Federal Reserve from being as aggressive with interest rate hikes as some had thought.

The Dow rose a percent and the S&P 500 gained 1.2%, while the Nasdaq also finished up a percent.

While two consecutive quarters of U.S. GDP declines are traditionally considered a recession, CapWealth's chief investment officer Tim Pagliara said it was difficult to determine in these unusual times.

"I'd say that's the technical definition [but] Chairman Powell said it doesn't feel like a recession and it probably doesn't at this point because of the high employment rate. You know, we are in an unusual period that has created this type of inflation. You know, it's post-pandemic. And none of the 100-year history that I went back and looked at last night with inflation and contractions and fed fund rates and the relationship with all of that, none of that included the particular aspects of a pandemic."

Meanwhile, the growth forecast for second-quarter earnings has risen this week as more S&P 500 companies have reported results and beaten analysts' expectations.

Among them, Ford Motor shares rose after the automaker reported a better-than-expected quarterly net income.

Shares of Facebook parent Meta Platforms fell after it reported on Wednesday its first-ever quarterly drop in revenue.

Shares of Apple and Amazon rose before both mega-caps reported results after the close.

Apple posted profit and sales that beat Wall Street expectations, while Amazon said it expects a jump in third-quarter revenue. Both stocks soared in extended trading.