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Investors appeared to rejoice on Friday as Federal Reserve Chair Jerome Powell said the "time has come" to begin cutting interest rates, in a declaration that reflected the central bank's confidence in its fight against inflation and the market's widespread belief that the economy no longer needs a restrictive policy.

The S&P 500 ( ^GSPC ) rose about 1.2%%, while the Dow Jones Industrial Average ( ^DJI ) added about 1.1%, or over 400 points. The tech-heavy Nasdaq Composite ( ^IXIC ) led gains, up roughly 1.5%, as all three gauges eyed a strong comeback from Thursday's closing losses .

Spirits turned buoyant as a day of reckoning for rate-cut bets finally arrived, after a week of mounting anticipation for what Powell would reveal during a speech Friday morning at Jackson Hole.

Speaking at the Kansas City Fed's annual economic symposium, Powell said: "The time has come for policy to adjust."

"The direction of travel is clear," Powell added, "and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks."

Slowing economic data has convinced the market to position for the Fed to lower rates in September, with opinion divided on the depth of the cut. Traders are pricing in around a 64% chance of a reduction of 25 basis points and 37% odds of 50 basis points, per CME's FedWatch tool .

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The benchmark 10-year Treasury yield ( ^TNX ) was down to around 3.8% in the wake of Powell's comments, near its lows of the year.