Markets close on a high as Powell hints at September rate cuts

Stocks rose all day Friday after Federal Reserve Chair Jerome Powell indicated there could be a possible rate cut down the line during his Jackson Hole speech.

After the market closed Friday, the Dow Jones Industrial Average was up 1.89%, while the S&P 500 rose 1.52%. Nasdaq was up 1.88%. 

At the annual Jackson Hole Economic Symposium in Wyoming, Powell gave a highly anticipated speech where he alluded to rate cuts. 

“The stability of the unemployment rate and other labor market measures allows us to proceed carefully as we consider changes to our policy stance," he said in his speech. "Nonetheless, with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance."

Financial markets rose sharply on Friday morning as Powell delivered his remarks. The S&P 500 jumped 1.3% while the Dow Jones Industrial Average spiked 700 points, or 1.6%.

Powell elaborated on his views of Trump's import taxes. He said he believed the impact of tariffs on prices are now "clearly visible," and argued they'll be "short-lived" so it wouldn't mandate a drastic change in the Fed's careful approach. Still, he made it clear Fed officials are maneuvering a difficult situation with the threat of inflation on one hand and a weakening labor market in the other, calling it a "challenging situation."

"Come what may, we will not allow a one-time increase in the price level to become an ongoing inflation problem," he said.

— Joseph Zeballos-Roig contributed to this article.