US stocks rallied on Friday as dovish remarks from US Federal Reserve Chair Jerome Powell solidified expectations that the central bank will cut its key policy rate in September.

In highly anticipated comments before the Jackson Hole Economic Symposium, Powell said "the time has come" to lower the Fed funds target rate, and "the upside risks of inflation have diminished".

"The long wait is over," said Ryan Detrick, chief market strategist at Carson Group in Omaha, Nebraska. "This was the dovish shift that market participants have been waiting for."

"The Fed is clearly turning to the dovish camp and Powell has made it crystal clear that September will be the start of multiple rate cuts coming the remainder of this year," Detrick added.

All three major US stock indexes jumped after the release of Powell's prepared remarks, with megacaps Nvidia, Apple and Tesla providing the most muscle. Small caps and regional banks were outperformers, rising 3.2 percent and 4.9 percent, respectively.

"Financials are at an all-time high, with a huge surge from regional banks," Detrick said. "One would think if a major calamity or a recession were on the horizon, regional banks and financials wouldn't be as strong as they’ve been."

All three indexes logged weekly advances, standing on the shoulders of last week's largest Friday-to-Friday percentage gains of the year.

Next week, the data-dependent Fed will have a raft of economic indicators to consider ahead of its September rate decision, including the Commerce Department's revised second-quarter GDP and its broad-ranging Personal Consumption Expenditures (PCE) report, which includes the Fed's preferred inflation yardstick.

The Dow Jones Industrial Average rose 1.14 percent, to 41,175, the S&P 500 gained 1.15 percent, to 5,635 and the Nasdaq Composite added 1.47 percent, to 17,878.

Workday beat quarterly revenue expectations and announced a US$1 billion stock buyback plan, sending shares of the human resources software firm up 12.5 percent, the biggest percentage gainer on the Nasdaq.

Ross Stores gained 1.8 percent after the discount retailer raised its fiscal 2024 profit forecast. Turbo Tax's parent Intuit sagged 6.8 percent in response to disappointing quarterly revenue. (Reuters)