The Dow Jones industrial average briefly crossed the 27,000 mark for the first time ever, boosted by bets that the Federal Reserve is poised to cut interest rates for the first time in a decade.
Stock markets were also supported by dovish comments from Powell, who on the first of his two days of testimony before Congress said on Wednesday that the central bank stood ready to "act as appropriate" to support record US economic growth.
In his testimony - the first instalment of two days on Capitol Hill this week - Powell pointed to "broad" global weakness that was clouding the US economic outlook amid uncertainty about the fallout from the Trump administration's trade dispute with China and other important economies.
Equities that had slumped since Friday's strong jobs report rallied back to intraday records after the Fed chairman signaled a willingness to lower rates, citing a slowing global economy and trade issues.
In his semiannual Monetary Policy Report to Congress, the Fed chair said global crosscurrents related to growth and trade had reemerged since policymakers met in May, with apparent progress on trade having since turned into greater uncertainty and with the central bank's contacts in business and agriculture reporting heightened concerns over trade developments. "Many FOMC participants saw that the case for a somewhat more accommodative monetary policy had strengthened".
In any event, Trump may get his desire for rate cuts, with Powell strongly suggesting in his testimony that the Fed would soon cut rates to safeguard the expansion.
Expectations of a pending rate cut drew additional support Wednesday when the Fed released the minutes of its June 18-19 meeting.
Brushing off criticism from President Trump, Powell hinted there may be scope for an imminent cut to USA interest rates when he addressed the House of Representatives Financial Services Committee. "It has really slowed down here, and one of the reasons is uncertainty around trade and global growth", Powell continued.
Powell will appear before the Senate Banking Committee on Thursday for a second day of testimony.
The Russell 2000 is down 10.58 points, or 0.7%.
Most experts dispute Trump's assertion that he has authority to either fire Powell or demote him from the chairman's post, and his attacks have raised alarms that he's undermining the Fed's long-recognized independence from political pressure.
President Donald Trump has repeatedly attacked the Fed for raising rates four times past year and has called for a full percentage point cut.
At the same time, in the view of Fed officials, Trump's policies - including higher tariffs and an unpredictable governing style - have increased economic risks and led them to consider the same rate reductions Trump has demanded. But with unemployment at close to record lows and the United States economy showing continued strength, the Fed left rates unchanged at it's last meeting.
Fed staff concluded the rise in world tariffs had a likely "material" impact on the slowdown in global trade previous year, and that "uncertainty surrounding trade policy could be leading firms to delay investment decisions and reduce capital expenditures". Investors still see a 100% likelihood of a rate cut this month.