Stocks surged Friday and the Dow closed at its first record high of the year after Federal Reserve Chair Jerome Powell signaled interest rate cuts could be on the way.

Minutes after the speech, investors pegged the chances of a quarter-point interest rate cut at 91%, up from a 75% chance assessed one day earlier, according to CME FedWatch Tool, a measure of market sentiment. Despite the market's positive reaction to Powell's speech, the Fed chair voiced a note of caution for the outlook for the U.S. economy.

The hope among investors had been that Powell would hint that the Fed's first cut to interest rates of the year may be imminent.