The Dow gained two-tenths of a percent, the S&P 500 climbed half a percent and the Nasdaq added six-tenths of a percent.
In prepared remarks to the House Financial Services Committee, Powell on Wednesday said inflation had "eased substantially" since hitting 40-year highs in 2022, but that policymakers still needed "greater confidence" in its decline before rate cuts.
Melissa Brown, Managing Director of Applied Research at SimCorp, noted nothing unusual in his remarks, but did find investors' optimism a bit surprising.
"Where I did see something that was a little bit more unusual, was the reaction of traders that we can see through the CME Fed watch tool. And although the difference was slight, they seem to have increased their probability that the rate cut would come sooner rather than later. So it went up a little bit from the probability we saw yesterday. And that was a little surprising to me because he also, you know, he talked about the strength in the economy and you know, jobs growth looking good. And so I was surprised."
February's jobs report, due on Friday, is expected to offer further clarity on Fed policy.
In company news, shares of Tesla fell more than 2%, losing ground for its third straight day. A closely watched Morgan Stanley analyst lowered his price target on the stock, saying that electric-vehicle demand was continuing to weaken in key markets including China despite hefty price cuts. Also a Baird analyst said Telsa's first-quarter earnings were at risk, suggesting delivery estimates still need to go lower.
Shares of cryptocurrency-linked companies advanced, including a 10% gain for Coinbase Global and MicroStrategy's 18.5% increase.
And shares of CrowdStrike Holdings soared nearly 11% after it forecast annual results above Wall Street estimates, lifted by strong enterprise spending on cybersecurity to counter rising online threats. However, rival Palo Alto fell 4%.
