Global equities rose sharply on Friday after Federal Reserve Chair Jerome Powell signaled that a rate cut could be possible as early as July, lifting investor optimism across major financial centers.

Markets in New York, London and Tokyo all posted solid gains as traders reacted to signs that inflation is cooling and that the central bank may soon ease borrowing costs. The prospect of lower rates boosted risk appetite, especially in sectors sensitive to financing conditions.

In the United States, the rally reflected growing expectations that the Fed may be nearing a policy shift after months of restrictive monetary policy. Analysts said the latest inflation readings gave investors more confidence that the central bank has room to begin cutting rates if price pressures continue to ease.

The reaction was broad-based, with benchmark indexes advancing in step as global investors reassessed the outlook for growth, corporate earnings and credit conditions. Still, market watchers cautioned that any rate cut would depend on incoming economic data and that the Fed is likely to remain cautious.