Stocks began surging upward even before Powell's speech began as the text was posted to the Federal Reserve's website.
"Stocks are rallying dramatically because Chair Powell took a far more dovish tone than he did just a month ago when he said rates were a long way from neutral", Kristina Hooper, chief global market strategist at Invesco Ltd, said in an email interview. With the Fed signaling fewer than three rate hikes next year, investors are being forced to adjust their U.S. Treasury bond and Japanese Treasury bond portfolios.
The Nasdaq 100 Index jumped nearly 3 percent, with the Amazon.com and Netflix each higher by at least 5 percent to lead the FANG cohort.
The S&P 500 index rose 61 points, or 2.3 percent, to 2,743.
With the Federal Reserve expected next month to raise rates to what some USA central bankers believe is at or near a neutral level, Chairman Jerome Powell is retuning his message to signal a more cautious approach on further rate hikes next year.
In his speech Wednesday to the Economic Club of New York, Powell said the Fed's benchmark interest rate was "just below the broad range of estimates of the level that would be neutral for the economy - that is, neither speeding up nor slowing down growth".
US new home sales stood at a seasonally adjusted annual rate of 544,000 in October, 8.9 percent below the revised September level, the Commerce Department said on Wednesday. FED Chair Jerome Powell, trader and investors are exercising caution on the Wall Street open. Financial markets have struggled since the Powell characterization, with the Dow Jones Industrial Average DJIA, +1.80% down about 8% from its October peak. It more than doubled its gains after Powell made his remarks.
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US stock indexes are rising as software maker Salesforce leads a rally in technology companies. "If US growth slows down next year, as expected, gold would benefit from higher demand", analysts including Jeffrey Currie said in a November 26 note that endorsed bullion as one of its top 10 trade ideas for commodities.
But the report highlighted stock prices that are high by some measures, commercial real estate values "growing faster than rents" and the willingness of lenders to fund risky corporate loans.
US consumer spending rose 0.6 percent in October after a downwardly revised 0.2 percent advance, beating market consensus, said the Commerce Department.
Tiffany plunged 12.1 percent after the jewelry seller said tourists from China pulled back on spending in the latest quarter.
The dollar index against a basket of six major currencies was effectively flat at 96.805 following an overnight loss of 0.6 percent.
In an appearance earlier this month, Powell cited strong annual economic growth above 3 percent and unemployment at a near five-decade low of 3.7 percent.
Software maker Salesforce.com jumped 6.5 percent after reporting a big beat in earnings. The Nasdaq composite climbed 46 points, or 0.7 percent, to 7,128.
Britain's 10-year yield declined two basis points to 1.377 percent.