Investors breathed a sigh of relief on Wednesday as major U.S. stock indices surged following remarks from Federal Reserve Chair Jerome Powell hinting at possible interest rate cuts later this year. The S&P 500 climbed 1.8%, while the Nasdaq Composite jumped 2.4%, led by strong performances from tech giants like Nvidia (NVDA), Apple (AAPL), and Microsoft (MSFT).

Powell, speaking at an economic forum, acknowledged progress in taming inflation, stating that the central bank could ease monetary policy if economic data continues to improve. “We are seeing encouraging signs in inflation metrics, but we remain cautious,” Powell said.

Market analysts suggest that investors are pricing in at least two rate cuts in 2025, with the first potentially arriving as early as September. Treasury yields dipped, with the 10-year note falling to 3.9%, boosting risk appetite.

Key Takeaways:

• Tech stocks outperformed, with the Nasdaq posting its best day in three months.
• Fed’s dovish tone fueled optimism, but some economists warn of over-enthusiasm.
• Oil prices edged higher amid geopolitical tensions, with Brent crude at $87 per barrel.