The Dow rises 500 points in the final hour of trading

Stocks rose on Wednesday after Federal Reserve Chairman Jerome Powell confirmed the central bank would slow the pace of its aggressive rate hike campaign that weighed on markets.

The Dow Jones industrial average rose 571 points, or 1.7%. Meanwhile, the tech-heavy Nasdaq Composite rose 3.9%. The S&P 500 added 2.7%.

“As we approach the level of control sufficient to reduce inflation, it makes sense to moderate the pace of our rate hikes,” Powell said. He said in a speech at the Brookings Institution in Washington, DC. “The time to moderate the pace of rate hikes may come after the December meeting.”

Powell warned that the Fed could remain accommodative for a long time before ending the inflationary struggle.

“Despite some promising developments, we have a long way to go in restoring price stability,” Powell said.

Powell’s comments spurred growing optimism among some investors that the central bank will offer a small, half-percentage-point rate hike at its next meeting on Dec. 14, after four straight increases of three-quarters of a point to control high inflation.

“Investors are looking for that solid rock — the one to hang your hat on for more predictability of where the Fed is going with interest rates,” said Greg Bassuk, CEO of AXS Investments. “The message that the pace of rate increases will begin to slow in December was that rock.”

The 10-year Treasury yield eased slightly on the news.

Both the Dow and S&P 500 are up more than 4% for the month, while the Nasdaq Composite is on track to gain 3%.

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