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Stocks rose on Friday as Wall Street welcomed a signal from Federal Reserve Chairman Jerome Powell that long-awaited interest rate cuts were finally coming.

The Dow closed 462 Points, or 1.1%, higher on Friday afternoon. The S&P 500 gained 1.2% and the Nasdaq Composite gained 1.5%. All three major indices ended the week in positive territory.

Powell said Friday morning at a key economic summit in Jackson Hole, Wyoming, that “the time has come” to adjust policy, with interest rates currently at a 23-year high. He also noted that the labor market has cooled sufficiently to stop fueling inflation and that the central bank does not want labor market conditions to deteriorate further.

“A September rate cut is essentially a done deal at this point. But the bigger question is whether this is a one-off rate cut or the start of a broader cycle of cuts. This will be determined by economic data over the next two to three months,” wrote Glen Smith, chief investment officer of GDS Wealth Management, in a note on Friday.

Minutes from the Fed’s July meeting released Wednesday show that the “overwhelming majority” of the Fed’s Open Market Committee wants to cut rates in September if inflation continues to ease. Some officials stressed the importance of communicating that the Fed is dependent on the data and does not have a pre-determined course.

Some politicians also fear that the labor market could become significantly weaker if restrictive policies continue for too long. Recent data has shown that job growth in the United States in the 12 months leading up to March was weaker than previously estimated. The Bureau of Labor Statistics’ preliminary review of employment data for 2024 found that there were 818,000 fewer jobs during that period.

This comes as job growth has slowed more than expected in recent months. Some investors fear the U.S. economy is on shaky ground as interest rates remain at a 23-year high. Slowing job growth combined with falling inflation has led traders to bet that the Fed will cut rates in September, as well as in November and December, according to the CME FedWatch tool.

While there is talk of a half-percentage point cut in interest rates at the Fed’s policy meeting next month, some investors say that is unlikely given the current data, as a move of that magnitude would indicate that the economy is heading toward or already in recession.

Fears of an economic slowdown have cooled since a weak July jobs report rattled markets in early August. Stocks have recouped all their losses from the global market slump after a cool consumer price index and retail sales data restored optimism for a soft landing, or a scenario in which the Fed cuts inflation without triggering a recession.

“Growth is slowing, but not quite yet, and this period of weakness should not be confused with the beginning of a recession. Growth fears are part of the economic cycle,” wrote Jack Janasiewicz, chief portfolio strategist at Natixis Investment Managers Solutions, in a note Tuesday.

Elsewhere, gold futures hit a record $2,570.40 an ounce on Tuesday before retreating.

Data on Thursday showed that sales of used homes in the U.S. rose 1.3 percent last month, ending a four-month stretch of declining sales. Sales fell 2.5 percent in July from a year earlier, according to data from the National Association of Realtors.

Target shares gained 10 percent this week after the company reported a rise in quarterly earnings on Wednesday. Macy’s shares fell 9.8 percent after the company reported a decline in sales in the latest quarter and cut its full-year sales forecast.

Boeing shares fell 2.8% this week after the company discovered problems with a structural component between the engine and the wings during a test flight of its long-delayed 777X aircraft, adding to Boeing’s troubles following the safety crisis earlier this year.

As stock prices stabilize after the trading day, levels may change slightly.