NEW YORK, New York - U.S. stock markets surged on Friday after Federal Reserve Chair Jay Powell indicated a change in monetary policy might be on the horizon, with market expectations for a September interest rate cut soaring to 91 percent. The U.S. dollar was ambushed by sellers, sending the greenback reeling.

Powell was addressing the economic symposium at Jackson Hole, Wyoming on Frday.

"The bar is extremely high now for the Fed to leave rates unchanged in less than a month," Chris Zaccarelli, chief investment officer at Northlight Asset Management told CNBC Friday. "It's no surprise that markets reacted with glee and both stock and bond investors will be happy if prices close this afternoon at the levels they are now trading."

In New York, all three major U.S. stock indexes finished the session with solid gains. The Dow Jones Industrial Average led the charge, jumping 846.24 points, or 1.89 percent, to close at 45,631.74, marking one of its strongest single-day advances this month, and notching up a new all-time high.

The Standard and Poor's 500 also delivered an impressive performance, rising 96.74 points to settle at 6,466.91, up 1.52 percent on the day. The rally was broad-based, with notable strength in technology, industrials, and consumer discretionary sectors.

The tech-heavy NASDAQ Composite followed closely behind, climbing 396.22 points, or 1.88 percent, to finish at 21,496.54. The index saw strong momentum from big-name tech firms and AI-related stocks, which have continued to benefit from long-term growth optimism.

Trading volumes were solid across the board, with the S&P 500 seeing nearly 2.98 billion shares exchanged and the NASDAQ recording 7.75 billion in volume, underscoring the strong investor participation in Friday's rally.

Global Forex Markets End Week with U.S. Dollar Weakening Sharply Against Majors

The global foreign exchange market closed the week with the U.S. dollar losing significant ground against several major currencies, as traders reacted to shifting expectations around interest rates and economic data from key economies.

The euro made solid gains against the greenback, with the EUR/USD pair rising 0.98 percent to last trade at 1.17195. The move came amid continued speculation that the European Central Bank may hold interest rates steady despite recent inflationary pressures.

In a sharp reversal, the U.S. dollar fell against the Japanese yen, with the USD/JPY pair declining 0.97 percent to 146.92. Investors sought safety in the yen as global equity markets showed signs of fatigue and concerns over slowing growth in Asia mounted.

The Canadian dollar also strengthened, with the USD/CAD exchange rate falling 0.60 percent to settle at 1.3826, supported by firm crude oil prices and stronger-than-expected Canadian retail sales data.

The British pound showed strong momentum, gaining 0.81 percent against the U.S. dollar. The GBP/USD pair settled at 1.3520, bolstered by upbeat UK consumer confidence figures and expectations that the Bank of England will remain cautious in its monetary approach.

Elsewhere, the U.S. dollar weakened against the Swiss franc, as the USD/CHF pair dropped 0.92 percent to 0.8012, continuing a trend of strength for the Swiss currency amid its safe-haven appeal.

The Australian dollar led gains among the commodity-linked currencies, as the AUD/USD pair climbed 1.05 percent to 0.6487. The move was driven by optimism over Chinese stimulus efforts and rising commodity prices.

Similarly, the New Zealand dollar rose 0.87 percent against the greenback, with the NZD/USD exchange rate closing at 0.5866. Traders cited stronger dairy export forecasts and a more positive tone from the Reserve Bank of New Zealand.

World Stock Markets Close Mixed on Friday as Asian Gains Offset Some Losses

Major stock indices across the globe posted positive gains to close out the week, with Canadian, UK and European benchmarks largely in the green, while Asian markets presented a more varied picture.

Canada's benchmark S&P/TSX Composite Index posted a  meaningful gain, rising 277.70 points to end at 28,333.13, an increase of 0.99 percent. 

In the UK and Europe, investors showed cautious optimism, pushing most indices higher by the closing bell. The FTSE 100 in London rose 12.20 points to finish at 9,321.40, a gain of 0.13 percent.

Germany's DAX Performance Index added 69.75 points, closing at 24,363.09, up 0.29 percent.

In France the  CAC 40 climbed 31.40 points to 7,969.69, a rise of 0.40 percent.

The broader EURO STOXX 50 Index also gained ground, adding 26.07 points to close at 5,488.23, marking a 0.48 percent increase. The Euronext 100 posted one of the stronger performances in the region, up 9.18 points to 1,631.55, or 0.57 percent. Belgium's BEL 20 rose 0.26 percent, ending at 4,848.12.

Asian markets offered a more mixed narrative. Hong Kong's Hang Seng Index jumped 234.53 points to 25,339.14, a gain of 0.93 percent, while South Korea's KOSPI advanced 0.86 percent to settle at 3,168.73.

Meanwhile, in Tokyo, the Nikkei 225 closed nearly flat, adding just 23.12 points to settle at 42,633.29, up only 0.05 percent.

Mainland China's Shanghai Composite (000001.SS) surged 1.45 percent, closing at 3,825.76.

However, not all Asian markets joined the rally. Taiwan's TWSE Index fell 197.66 points to 23,764.47, a loss of 0.82 percent.

In India the S&P BSE Sensex slid 693.86 points, or 0.85 percent, to 81,306.85.

In Indonesia, the IDX Composite dropped 0.40 percent to 7,858.85, while New Zealand's NZX 50 slumped 1.15 percent to end at 13,042.76.

Australia faced notable declines, with the S&P/ASX 200 shedding 51.70 points, down 0.57 percent, closing at 8,967.40. The broader All Ordinaries Index followed suit, losing 49.90 points, or 0.54 percent, to close at 9,234.30.

In Southeast Asia, Singapore's Straits Times Index added 22.12 points to end at 4,253.02, up 0.52 percent.

In Malaysia the KLSE Index also saw a moderate increase of 0.29 percent, closing at 1,597.47.

South Africa's market showed strong momentum, with the JN0U.JO index jumping 2.50 percent to 5,853.70.

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