The Dow climbed eight-tenths of a percent, the S&P 500 gained six-tenths, while the Nasdaq added more than half a percent.
Powell's remarks, delivered at an event at Atlanta's Spelman College, reflected an increased confidence that the current policy rate may be adequate to bring inflation down to the Fed's 2% target.
Brad Bernstein, Managing Director at UBS Private Wealth Management, believes that in 2024 the Fed will have achieved a soft landing for the economy.
"We think the Fed will be cutting [rates] by the summer, and I think the market and the economy will be starting to really price that in. Yes, I do think that based on strong labor demand, solid investment spending and sizable household savings, still we will absolutely avoid a recession next year."
In company news, shares of Pfizer slid 5% after the drugmaker dropped plans to advance a twice-daily version of oral weight-loss drug danuglipron into late-stage studies, delaying its entry into the lucrative market.
Shares of Marvell Technology shed more than 5% after the chipmaker's fourth-quarter revenue forecast fell short of Street estimates.
Ulta Beauty surged nearly 11% after the cosmetics retailer raised the lower end of its annual net sales forecast and named a new chief financial officer.
And shares of Paramount Global jumped about 10% following a report the media company and Apple have discussed bundling their streaming services at a discount.