The S&P 500 rallied 1% to set its 16th all-time high so far this year. It’s been on a terrific run and is on track for its 17th winning week in the last 19 after erasing the last of its losses from Monday and Tuesday.

The Dow Jones Industrial Average added 130 points, or 0.3%, and the Nasdaq composite jumped 1.5% to finish just shy of its record.

Federal Reserve Chair Jerome Powell said in testimony on Capitol Hill that the central bank is “not far” from delivering the cuts to interest rates that Wall Street craves so much. He said again that the Fed is just waiting for additional data to confirm inflation is cooling.

It’s a key point on Wall Street because cuts to rates would release pressure on the economy and the financial system, while goosing investment prices. After shelving earlier hopes for cuts to begin in March, traders now see June as the likeliest starting point. The Fed’s main interest rate is at its highest level since 2001.

After getting criticism for waiting too long before raising interest rates when inflation was accelerating, Powell faced questions from the Senate’s banking committee about the possibility that it could be too late in cutting rates. That would cause undue pain because high rates slow the economy.

“We’re well aware of that risk, of course,” Powell said.

He said if conditions continue as expected, including a strong job market and cooling inflation, cuts will come later this year. Cutting rates too early could risk a reacceleration of inflation.

Treasury yields eased in the bond market after a couple reports gave potential signals of lessened pressure on inflation.

The yield on the 10-year Treasury dipped to 4.08% from 4.11% late Wednesday. It’s been generally falling since topping 5% last autumn, which can encourage borrowing across the economy and investors to pay higher prices for stocks. The two-year Treasury yield, which moves more closely with expectations for the Fed, fell by more.

Across the Atlantic, traders were also trying to guess when the European Central Bank will begin cutting interest rates after its president said it’s making progress on getting inflation under control.

One report said slightly more U.S. workers applied for unemployment benefits last week than expected, though the number remains low relative to history.

A separate report said U.S. workers were able to produce more stuff per hour during the last three months of 2023 than expected. Such improvement is key because it can allow the economy to grow without adding as much upward pressure on inflation.

A potentially more impactful report will arrive Friday morning, when the U.S. government will give its latest monthly update on the job market. The hope among traders is that the job market remains healthy but not so much that it deters the Federal Reserve from cutting interest rates.

On Wall Street, Kroger jumped 9.9% for the biggest gain in the S&P 500 after it reported stronger-than-expected profit for the end of 2023. It also gave a forecast range for profit in the upcoming year whose midpoint was above analysts’ estimates.

Nvidia was again the strongest force lifting the S&P 500 upward and climbed 4.5%. It’s been on a nearly unstoppable run and has soared 87% this year after more than tripling last year amid Wall Street’s frenzy around artificial-intelligence technology.

Victoria’s Secret was on the losing end even after it reported stronger profit for the latest quarter than expected. It said it expects overall sales to fall this upcoming year, when analysts were looking for modest growth. It tumbled 29.7%.

Shares of embattled New York Community Bancorp climbed 5.8% a day after going on a wild ride. The bank, which is confronting weakness in commercial real estate and growing pains resulting from its buyout of a distressed bank, announced a lifeline of more than $1 billion from a group of investors on Wednesday.

The bank is also cutting its dividend again, down to a penny from 5 cents. A prior cut to its dividend earlier this year, along with a surprise loss reported for its latest quarter, drove much of the fear around NYCB. The bank also said it has $77.2 billion in total deposits, down from $83 billion roughly a month ago.

Analysts are still saying NYCB’s problems are mostly specific to it, rather than a warning of impending doom for the broader industry, but stocks of other regional banks have been skittish. The KBW Nasdaq Regional Banking index edged up by 0.1%.

All told, the S&P 500 rose 52.60 points to 5,157.36. The Dow gained 130.30 to 38,791.35, and the Nasdaq composite climbed 241.83 to 16,273.38.

In stock markets abroad, indexes rose in Europe after the European Central Bank left its main interest rate alone. Japan’s Nikkei 225 index briefly reached a record before falling to a loss of 1.2%.

___

AP Business Writers Yuri Kageyama and Matt Ott contributed.