After wiping out most of the year’s gains over the past few weeks, indexes rocketed higher on Wednesday.

The Dow Jones exploded 617 points.  The NASDAQ was up 204.  The S&P 500 soared 61.  And it was all thanks to comments from Federal Reserve Chairman, Jerome Powell.

He noted that the outlook for the U.S. economy remains solid and that interest rates are nearly within a “neutral range.”  That means, while the Fed may raise interest rates in December 2018, it’s not overly concerned about inflation.

His comments also indicate that rates may not rise as quickly as many had feared.

"Interest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy — that is, neither speeding up nor slowing down growth," said Powell, as quoted by NPR.

That’s good news for investors, who were concerned that the central bank was tightening monetary policy far too quickly. While the Fed is likely to raise rates at the December 2018 policy meeting, traders now only foresee one more hike for all of 2019.

Easing concerns on the U.S. and China trade war also boosted stocks.

At the moment, there’s creeping anxiety about the costs a lengthy trade war could have on the U.S. economy and financial markets.  However, according to a New York Times report, Trump may be prepared to reach a compromise at the G-20 meeting with Chinese president Xi Jinping.

That could set the stage for a truce between the U.S. and China, notes The New York Times, in “the form of an agreement that would delay new tariffs for several months while the world’s two largest economies try to work out issues dividing them.”

Should a deal fail to materialize, the Trump Administration is expected to raise tariffs from 10% to 25% on $250 billion worth of Chinese imports by January 1, 2019.

We’ll know more on Saturday when Trump and Xi Jinping talk at the G-20 meeting.

Should they make progress, we could see markets explode higher on Monday morning.

Stay tuned to The Cheap Investor for more on this rapidly developing story.