U.S. stock indexes extended gains Friday after Federal Reserve Chair Jerome Powell pointed to a possible rate cut at the central bank's next policy meeting in his remarks at the Jackson Hole Symposium.

Powell hinted at a possible rate cut at the central bank's September meeting, but stopped short of committing to cutting interest rates in remarks that walked a narrow line acknowledging growing risks to the job market, while also saying risks of higher inflation remained.

At 10:25 a.m. ET, the Dow Jones Industrial Average rose 723.61 points, or 1.62%, the S&P 500 gained 89.43 points, or 1.40%, and the Nasdaq Composite gained 347.47 points, or 1.65%.

At the Wyoming research conference last year, Powell had promised to lower rates and support the job market when the unemployment rate started to rise, while in 2022 he underscored the Fed's inflation-fighting rigor.

"Balancing the risks between a weakening labor market but without commensurate easing in wage growth and inflation will likely feature prominently in Powell's Jackson Hole speech today," Geoff Yu, EMEA macro strategist at BNY said in a note.

His comments, expected at 10 a.m. ET, could play a pivotal role in shaping the rate-cut expectations for September.

Traders now see a 71.3% chance of a 25-basis-point rate cut next month, down from a 85.4% chance a week ago, according to the CME FedWatch Tool.

Markets had initially ramped up the bets following a weak payrolls report at the start of this month and after consumer price data showed limited upward pressure from tariffs.

Other Fed officials speaking on Thursday appeared not so keen on the idea of a rate cut next month.

Against this backdrop, all three main U.S. stock indexes are set for weekly losses, with the S&P 500 and the Nasdaq on pace for their worst weekly showing of the month.

The S&P 500 took its string of losses to a fifth straight day on Thursday. A broad-based selloff in heavyweight technology stocks has kept U.S. equities under pressure this week.

Information technology is the worst hit sub-sector this week, while energy and real estate are on track for mild weekly gains.

Among early movers, Nvidia slipped 1.1% in premarket trading after reports that the chipmaker has asked Foxconn to suspend work on the H20 AI chip, the most advanced product the company is permitted to sell to China.

Google-parent Alphabet gained 1.2% after reports that the company has struck a six-year cloud computing deal with Meta Platforms worth more than $10 billion. Meta shares were last up 0.2%.

Workday shed 4.4% after the human resources software provider gave an in-line outlook for the current quarter.