Jerome H. Powell said the “balance of risks” across the economy had started to shift, raising the odds the central bank lowers borrowing costs at its next meeting in September.

The S&P 500, one of the broadest index of stocks, climbed 1.5%, while the tech-focused Nasdaq increased 1.9%. The 30-stock Dow Jones Industrial Average also jumped about 1.9%, closing at a fresh all-time high.

Federal Reserve chairman Jerome Powell signaled a possible interest rate cut in the months to come, sending stocks sharply higher.