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NEW YORK/LONDON  - The dollar retreated and Wall Street rallied on Thursday as investors looked past weak U.S. GDP and jobless claims data to hopes of a rosier economy ahead and welcomed restrictions on the social media-driven trading frenzy.

Online trading platforms Robinhood and Interactive Brokers restricted trading in shares of GameStop, BlackBerry and other companies that saw hefty gains this week after they were targeted by an army of retail buyers.

Shares of GameStop plunged about 44% from Wednesday's close, to $196.14, after hitting $483 earlier in the session. The shares had traded under $20 at the beginning of the year.

Hedge funds would have had more margin calls if GameStop had kept going higher, said Thomas Hayes, managing member at Great Hill Capital LLC in New York.

"When it backed off a little bit, the market breathed a sigh of relief," Hayes said.

The main Wall Street indexes on Wednesday registered their sharpest declines in three months after a squeeze on hedge funds holding short positions in the social-media darlings.

MSCI's benchmark for global equity markets rose 0.88% to 658.22, while the Dow Jones Industrial Average rose 2%, the S&P 500 gained 2.00% and the Nasdaq Composite added 1.5%.

Stocks in Europe traded little changed as countries grappled with new variants of the coronavirus amid extended lockdowns that weigh on near-term economic growth. The broad FTSEurofirst 300 index added 0.01% to 1,554.45.

The safe-haven U.S. dollar fell in choppy trading and riskier currencies, including the Australian dollar, reversed early losses as stocks rebounded.

U.S. gross domestic product grew at a 4% annualized rate in the fourth quarter, in line with economists' forecasts, though for all of 2020 the economy contracted 3.5%, the worst performance since World War Two.

While GDP contracted over all of last year, data suggested a faster recovery than many expected. Other reports showed U.S. jobless claims were lower than expected at 847,000, compared with forecasts of 875,000.

The dollar index fell 0.161%, with the euro up 0.12% to $1.2122.

The Japanese yen weakened 0.16% versus the greenback at 104.28 per dollar.

U.S. long-dated Treasury yields rallied from three-week lows. The U.S. government will auction $62 billion in U.S. seven-year Treasury notes.

"The Treasury market is operating under the assumption that we will be hitting a soft patch here in the first quarter," said Kevin Flanagan, head of fixed income strategy at WisdomTree. "The numbers are kind of being ignored," he said.

Oil was steady as the impact of a weaker dollar and big U.S. crude inventory drawdown offset concerns that delays to vaccine rollouts and fresh travel curbs to prevent new coronavirus outbreaks could depress demand.

Brent crude futures fell $0.13 to $55.68 a barrel. U.S. crude futures slid $0.38 to $52.47 a barrel.

Spot gold prices fell -0.15% to $1,841.21 an ounce.