Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole Economic Symposium marked a significant turning point for the U.S. stock market. In his address, Powell declared that “the time has come” for the Fed to begin cutting interest rates, a move that has been widely anticipated by investors. This announcement led to a surge in stock prices across various indexes, with the S&P 500 rising 1.2%, the Dow Jones Industrial Average adding 1.1%, and the Nasdaq Composite climbing 1.5%.

Powell emphasized that the direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks. His speech was seen as a clear signal that the Fed is shifting its stance from tightening to easing, which has boosted investor confidence. The real estate sector, in particular, led the S&P 500’s advance, rising 3.5%, as investors cheered the prospects of lower interest rates.

The Fed’s decision to cut rates is expected to support economic growth and maintain a strong labor market. Powell acknowledged the recent softness in the labor market but stressed that the Fed does not seek further cooling in labor market conditions. This move is seen as a response to the slowing economy and the need to address inflation, which has fallen to 2.5% from its peak of 7.1% two years ago.

Overall, Powell’s speech has been interpreted as a clear indication that the Fed is preparing to initiate interest rate cuts, which has been welcomed by the market and is expected to have a positive impact on the economy and financial markets.