Wall Street closed at record highs on Friday after Federal Reserve Chair Jerome Powell signaled that interest rate cuts could come as soon as the central bank’s next meeting in September. Speaking at the Jackson Hole Symposium, Powell said any decision would hinge on upcoming inflation and labor data but acknowledged that a rate cut is actively under consideration.

The remarks sparked a wave of investor optimism. The S&P 500 surged 1.52% to 6,466.55, the Nasdaq jumped 1.88% to 21,496.54, and the Dow Jones Industrial Average gained 1.88%, closing at 45,626.64 — its first record high of the year. Traders priced in a nearly 90% chance of a September cut, up from 75% before Powell’s comments.

All but one S&P 500 sector advanced, with consumer discretionary and tech stocks leading. Tesla helped drive gains in megacap growth, and semiconductor stocks surged, pushing the Philadelphia Semiconductor Index higher. The Russell 2000 Index also hit its highest level of 2025, showing the rally’s broad strength.

Powell’s comments come amid renewed pressure from President Donald Trump, who has repeatedly criticized the Fed chair for not acting aggressively enough. In July, Trump demanded Powell’s resignation after claims from Federal Housing Finance Agency Director Bill Pulte that Powell misled Congress over the Fed’s $2.5 billion headquarters renovation. Pulte accused Powell of “deceptive” testimony and political bias.

Trump has long called for lower rates, warning that high borrowing costs hurt growth and housing. With rate cuts potentially on the horizon, markets appear to be rallying behind the prospect of looser monetary policy.