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.

Asian shares have tracked Wall Street's rally after the head of the Federal Reserve hinted that cuts to interest rates may be on the way

Morgan Stanley has joined a growing bloc of global brokerages forecasting a September interest rate cut by the U.S. Federal Reserve, citing Chair Jerome Powell's shift in tone toward labor market risks at the Jackson Hole symposium.

Brian Mulberry, senior portfolio manager at Zacks Investment Management, noted that Powell’s stance seemed more aligned with that of Fed Governor Christopher Waller, who dissented from the Federal Open Market Committee's “wait-and-see” approach to holding rates steady last month.

Federal Reserve Chair Jerome Powell carefully opened the door to an interest-rate cut in September, pointing to rising risks for the labor market even as worries over inflation remain.