Stocks roared back Friday after investors received three belated New Year's presents.
The Fed chief stressed that the economy remained on track and that the job market was quite strong. China took action to stimulate its slowing economy.
Powell triggered an additional surge in the markets after he walked back the comment made in December that shook up investors and made him sound like his sole mission was to reduce the central bank's balance sheet.
The tech sector was the best performing subset of the S&P 500, rising 4%. Currently, the USA inflation rate remains below what the Fed considers an optimal 2 percent level, meaning there is still space for economic expansion and workers are just beginning to benefit from the growth. Facebook rose 5 percent.
Overall, she said she felt the Fed was in a "really good spot". "This proves I was correct".
Wall Street has surged to close at its highest level in two weeks after a strong jobs report and assurances from US Federal Reserve Chairman Jerome Powell that the central bank would be patient and flexible in steering the course of interest rates.
"Investors are breathing a sigh of relief right now", Sam Stovall, chief investment strategist at CFRA Research, told CNN.
He pointed the strong U.S. economic data - including a blockbuster jobs report for December - but noted financial markets were anxious about a slowdown in the United States and Chinese economies.
Powell called the jobs report "very strong", with USA data "on track to sustain good momentum into the new year". The greenback fell despite US job growth surging and comments from Federal Reserve Chairman Jerome Powell that the central bank will be sensitive to market concern about a USA economic slowdown. He did not address Fed forecasts from December that sketched out two more rate rises this year, but, combined with the messages of Fed presidents who in recent days downplayed that tightening plan, he delivered the sort of temperate message investors had hoped to hear. The unemployment rate inched up from a five-decade low to 3.9% as more people entered the labor market to find work. Average hourly earnings advanced 3.2 percent from a year earlier, matching the fastest pace since 2009.
In a session emblematic of the elevated volatility that has gripped markets for weeks, all three major US stock indexes surged more than 3 percent in one of the broadest advances in years.
But the report could show signs of where things are headed for 2019 in America amid continued trade uncertainty and as tax cut effects wear off.
About 90 per cent of the stocks on the New York Stock Exchange traded higher.
A few minutes before the speech, the Dow Jones Industrial Average was up 186.35 points, or 0.75 percent, at 24,935.08, the S&P 500 was up 9.76 points, or 0.36 percent, at 2,691.93 and the Nasdaq Composite was up 28.90 points, or 0.41 percent, at 7,111.60.