Analysts predicted that job reports for January and February will be more of a policy reference for the Fed than the December report as they would provide a clearer picture of how tightened financial conditions affect the USA economy.
In the cash market, the benchmark S&P 500 Index settled at 2531.94, up 84.05 or +3.17%.
"Particularly with the muted inflation readings that we've seen coming in, we will be patient as we watch to see how the economy evolves", Powell told the American Economic Association in Atlanta.
Wall Street stocks surged higher on Friday (Jan 4) to finish a volatile week on an upbeat note following dovish Federal Reserve comments and a strong USA jobs report. The Fed has raised interest rates nine times since the end of 2015.
Nonfarm payrolls rose by 312,000 in December, surpassing analyst forecasts.
Bourses in Paris, Frankfurt and London all surged at least two percent, also boosted in part by the U.S. momentum. "We don't believe our issuance is an important part of the story", he said.
Cathay Pacific to honour bargain $973 first class flight prices
Typically, Cathay Pacific would charge around A$23,200 (US$16,000) for first-class or business-class tickets from Vietnam to NY . Other flights from Vietnam to United States airports were also offered at drastically reduced rates.
U.S. Treasury yields jumped on Friday, triggering a massive break in the Treasury notes and Treasury bonds futures markets. Yet signs are growing that Trump's tit-for-tat trade war with China is taking a toll: this week, tech giant Apple and grains trader Cargill warned about weaker sales in China.
"The market's been grappling with growth, the Fed and China", said Tony Roth, chief investment officer at Wilmington Trust in Wilmington, Delaware.
"The markets are feeling better that the Fed is not strangling the overall economy and perhaps forcing it into a recession, and that removes a monetary policy concern that has been hanging over the market for the past few months", said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC.
Powell triggered an additional surge in the markets after he walked back the comment made in December that shook up investors and made him sound like his sole mission was to reduce the central bank's balance sheet.
While not a change in policy, it was a nod to market concerns that the Fed had a key decision on "auto-pilot", as Powell put it last month, even as it pledged to be dependent on economic data.
Analysing the Fed statements, James Glassman, senior economist at JP Morgan said, "We have got very strong job news, the economy got lot of momentum to generate this kind of job news then why has the US Fed become cautious - it is because the inflation trends have been little more moderate". He also said that the central bank would be willing to "adjust" policy if it disrupted the market or created adverse financial conditions, running against the central bank's statutory goals.