The New York Stock Exchange's key indexes set new record highs on Thursday, fueled by expectations that the US Federal Reserve will cut interest rates.
In testimony to the House Financial Services Committee on Wednesday, Powell said business investments across the USA have slowed "notably" recently as uncertainties over the economic outlook linger.
The Dow and S&P 500 rose on Thursday to close at record highs as health insurers gained after the Trump administration scrapped a plan created to rein in prescription drug prices, while financial shares climbed with bond yields.
US benchmark bond yields rose, and the S&P 500 financial index .SPSY gained 0.6%.
The benchmark S&P 500 has climbed about 19% this year and briefly breached the 3,000 point mark for the first time on Wednesday. The Nasdaq Composite reached an all-time high, gaining 1% quickly on Wednesday morning.
That follows data from Thursday that showed underlying consumer prices increased in June to an nearly one-and-a-half year high.
This could be bullish for gold because it would raise concerns about the global economy and possibly put a 50-basis point rate cut back on the table.
His comments affirmed market expectations - money markets expect one rate cut later this month and a cumulative 68 basis points of cuts until the end of 2019 - but market watchers said Powell's views will drive the dollar.
Powell's remarks on Wednesday sent stocks surging as investors believed the Fed chairman was sending his strongest signal yet that the Fed was ready to cut its policy rate, which now stands in a range of 2.25% to 2.5%. Market sentiment surrounding the strength of the global economy could be further influenced by China's economic data releases due over the coming days, including external trade, industrial production, and Q2 GDP, as the world's second largest economy continues to find its path towards a more sustainable path amid heightened external headwinds.
Investors have taken Powell's comments as confirmation that rates are headed lower at the Fed's next meeting on July 30-31.
On Thursday, July 11, the Labor Department reports on US consumer prices for June.
In a series of comments and tweets the U.S. president has accused the Fed of unnecessarily slowing the economy by not cutting rates. Today's Chinese trade and finance numbers could provide another external catalyst as well. Additionally, European investors are keeping on the European Central Bank's monetary policy.
Powell dodged a question about what economic factors would necessitate a deep rate cut, only saying that policymakers look at a broad range of data when making decisions about monetary policy. Many Fed officials historically would then support raising interest rates to forestall what was called a "wage-price spiral".