(Updates to market close)
By Stephen Culp
NEW YORK, April 8 (Reuters) - A tech rally pushed the S&P 500 to an all-time closing high on Thursday and Treasury yields extended their pull-back from recent peaks as market participants digested the U.S. Federal Reserve's vow to stay the course with its dovish monetary policy.
The Nasdaq led the way, advancing more than 1%, but the blue-chip Dow's gain was more modest.
"It's a little bit of a Fed-driven day going back to their comments yesterday of rates remaining low for an extended period of time - we’re seeing interest rate-sensitive stocks like technology benefiting from that," said Jeff Carbone, managing partner at Cornerstone Wealth in Huntersville, North Carolina.
"There are really no major drivers right now" until earnings season starts next week, he added.
European stocks closed at record highs on growing optimism about a global stimulus-driven economic revival and reassurances from the Fed.
"Europe has not been able to get out of its own way for a long time," said Jamie Cox, managing partner for Harris Financial Group in Richmond, Virginia. "It's nice to see it pick up a bit.
"Now is the time for value stocks, and European indices are chock full of them," Cox added.
Minutes of the Fed's last policy meeting, published on Wednesday, showed board members felt the economy was still short of target and reiterated their accommodative monetary stance.
"The Fed have said they are watching inflation and took the air out of the situation quite a bit," Cox said. "The market got what it wanted out of the Fed."
Fed Chairman Jerome Powell expanded on that topic on Thursday at an International Monetary Fund event, saying that while the economic reopening could result in a momentary surge in prices, he expects it to be temporary and it will not constitute inflation.
A report from the U.S. Labor Department showed jobless claims unexpectedly increased last week, a blemish among a string of otherwise upbeat recent economic data.
The Dow Jones Industrial Average rose 57.31 points, or 0.17%, to 33,503.57, the S&P 500 gained 17.22 points, or 0.42%, to 4,097.17 and the Nasdaq Composite added 140.47 points, or 1.03%, to 13,829.31.
The pan-European STOXX 600 index rose 0.58% and MSCI's gauge of stocks around the globe gained 0.48%.
Emerging market stocks rose 0.34%. MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.55% higher, while Japan's Nikkei lost 0.07%.
U.S. Treasury yields fell on Thursday, pressured by Powell's dovish comments and weaker-than-expected initial weekly jobless claims.
Benchmark 10-year notes last rose 9/32 in price to yield 1.6244%, from 1.654% late on Wednesday.
The 30-year bond last rose 13/32 in price to yield 2.3168%, from 2.336% late on Wednesday.
The dollar dropped to a two-week low against a basket of currencies, tracking Treasury yields following the surprise rise in U.S. unemployment applications.
The dollar index fell 0.42%, with the euro up 0.36% to $1.1913.
The Japanese yen strengthened 0.54% versus the greenback at 109.28 per dollar, while sterling was last trading at $1.3733, down 0.01% on the day.
Crude oil prices were little changed as Wall Street's rally and the soft dollar offset concerns over a big jump in U.S. gasoline stocks.
U.S. crude fell 0.28% to settle at $59.60 per barrel, while Brent settled at $63.20 per barrel, up 0.06% on the day.
Gold prices jumped, scaling a one-month peak as the Fed's assurances that it will maintain its accommodative policy weighed on Treasury yields and the greenback.
Spot gold added 1.1% to $1,756.36 an ounce. U.S. gold futures settled up about 1% at $1,758.2.
(Reporting by Stephen Culp; additional reporting by Huw Jones; Editing by Dan Grebler)