Gatherings on Wall Street after Powell declares his almost neutral political rate

(Reuters) – US stock indexes rose more than 1.5% on Wednesday after Federal Reserve Chairman Jerome Powell said the key rate was "just below" neutrality, which has soothed the concern of a faster rate hike next year.

The Fed's gradual interest rate hikes are aimed at balancing risk as it tries to keep the economy on track, Powell said, but gave little indication of how long the bank will take. US central would continue to raise interest rates in the event of a global slowdown and market. volatility at home.

"He now recognizes that he is close to neutrality, which suggests that investors should not raise their rates as much in the future.It is a change of language and good news." for investors, "said Jack Ablin, investment manager at Cresset Chicago.

"This makes the value of risk aversion less appealing and therefore makes risk taking more attractive, such as equity investments."

Ten of the top 11 S & P sectors were up, with the tech sector leading the gains at 2.45%.

Two-year treasury returns , which reflect traders' expectations for rising interest rates, has fallen, while longer-dated federal futures have risen, suggesting a decline in expectations of interest rate hikes after December 2018.

Financials increased 1.2%, boosted by gains from US lenders including JPMorgan Chase & Co., Morgan Stanley, Goldman Sachs Group Inc., Wells Fargo & Co and Bank of America Corp.

Earlier in the day, the central bank, in a first-ever report on financial stability, said trade tensions, Brexit talks, unrest in China and emerging markets could upset an American financial system where asset prices are "high" and the quality of business credit may be "deteriorate".

At 12:49 pm EDT, the Dow Jones Industrial Average was up 477.47 points, or 1.93%, to $ 25,226.20, the S & P 500 up 42.76 points or 1.59% , at 2,724.93 and Nasdaq Composite up 142.77 points, or 2.02%. at 7.225.47.

Larry Kudlow, the White House's economic adviser, said on Tuesday that the markets were keen to suggest that the US and China could reach a trade deal at the next G20 summit.

Increasing issues outnumbered the decline with a ratio of 3.45 to 1 on and 2.96 to 1 on Nasdaq

The S & P index posted 13 new highs over 52 weeks and five new lows, while the Nasdaq recorded 25 new highs and 107 new lows.

(Report by Amy Caren Daniel in Bengaluru and Sinead Carew, edited by Arun Koyyur)