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Investing.com – Stocks rallied Wednesday and hit new highs after Federal Reserve Chairman Jerome Powell assured lawmakers the central bank will do what it can to sustain the economic expansion.

The Fed will “act as appropriate,” Powell told the House Financial Service Committee in the first of two days of testimony about the state of the economy. It is a phrase he has used often in the last few months because he and the Fed are worried about the domestic economy and slowing business investment, trade disputes and other issues affecting global economic health.

But it was music to investors’ ears. The surged 0.75%, hitting new closing and intraday highs. The jumped at the open, briefly topping 3,300 for the first time before dropping back to a 0.45% gain and just under its July 3 close of 2,995.82 The added 0.3%, also reaching a new intraday high of 26,983, up 200 points from the day before. But then the blue chips slid back.

The stock rally was accompanied by a 4.5% jump in oil prices, which was partly due to worries that storms in the Gulf of Mexico will shut down offshore production wells. The Gulf produces about 17% of oil. crude, the benchmark U.S. oil, finished up $2.60 to $60.43 a barrel. , the global benchmark, added $2.85 to $67.01. WTI is up 33% this year, while Brent is up nearly 25%.

Gold, meanwhile, moved solidly above $1,400 an ounce, finishing at $1,212.50 an ounce, and palladium shot up toward $1,600 an ounce.

But the big question of the day was if the Fed believes it needs to cut interest rates. And Powell offered many reasons that seemed to suggest a rate cut is coming at its July 30-31 meeting. Investing.com’s Fed Rate Monitoring tool suggests the Fed will cut its key federal funds rate to 2%-2.25% from 2.25-2.5%. And maybe another rate cut in the fall.

Rates have been coming down as global economic worries — most prominently the U.S.-China trade dispute and tensions in the Middle East — grabbed investor attention. But Wednesday, longer term rates were higher. The moved up to 2.07% from 2.06% as investors shed bonds for stocks. The 10-year yield is still off 23% this year.

The market was led by energy stocks, thanks to the boost in oil prices. Chevron (NYSE:) was the leader with a 1.7% gain. Exxon Mobil (NYSE:) added 1.4%.

Communications services, including Amazon.com (NASDAQ:) and Google parent Alphabet (NASDAQ:), also were market leaders, along with tech stocks. Microsoft (NASDAQ:), Apple (NASDAQ:) and Intel (NASDAQ:) were all up 1%.

After hours, shares of Bed Bath & Beyond (NASDAQ:) rose 3.5% after earnings beat estimates.

Winners and losers in the

Chesapeake Energy (NYSE:), data-storage company Western Digital (NASDAQ:) and healthcare technology manufacturer Align Technology (NASDAQ:) were among the top S&P 500 performers on the day.

Hanesbrands (NYSE:), life-insurance company Unum Group (NYSE:) and equipment distributor WW Grainger (NYSE:) were among the weakest S&P 500 performers.

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