The Dow shot up 846.24 points (1.9%) to 45,631.74, the Nasdaq surged 396.22 points (1.9%) to 21,496.53 and the S&P 500 jumped 96.74 points (1.5%) to 6,466.91.

Federal Reserve Chair Jerome Powell's remarks at the Jackson Hole Symposium boosted investor confidence that a rate cut is likely next month while he briefly addressed monetary policy, Powell highlighted that inflation has eased significantly and the labor market remains stable, allowing the Fed to move cautiously.

Powell emphasized that policy is not on a preset path but guided by data and shifting risks. Markets reacted positively, with CME Group's FedWatch Tool showing an 83.1% probability of a quarter-point rate cut in September, with sectors like home construction, small caps and banks seen as key beneficiaries.

Airline stocks turned in one of market's best performances on the day, with the NYSE Arca Airline Index soaring by 5.7% to its best intraday level in nearly six months. Oil service stocks showed a substantial strength, as reflected by the 5.1% spike by the Philadelphia Oil Service Index. With the surge, the index reached a four-month closing high. Housing stocks strong moved upwards, driving the Philadelphia Housing Sector Index up by 4.5% to its best closing level of the year. Networking, steel and computer hardware stocks too saw significant strength, moving higher along with most of the other major sectors.

Asia-Pacific stocks turned in another mixed performance. China's Shanghai Composite Index jumped by 1.5% and Japan's Nikkei 225 Index inched up by 0.1% while Australia's S&P/ASX 200 Index slid by 0.6%. The major European markets all moved to the upside on the day. While the French CAC 40 Index climbed by 0.4%, the German DAX Index rose by 0.3% and the U.K.'s FTSE 100 Index inched up by 0.1%.

In the bond market, treasuries moved sharply higher in reaction to Powell's speech. Subsequently, the yield on the benchmark ten-year note which moves opposite of its price, slumped 7 bps to 4.26%.

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