Stocks climbed on Friday as Federal Reserve Chair Jerome Powell said the "time has come" to begin cutting interest rates, offering the clearest signal yet that the central bank is prepared to begin an easing cycle, with major implications for the economy.

The S&P 500 (^GSPC) rose 1%, while the Dow Jones Industrial Average (^DJI) added 0.7%. The tech-heavy Nasdaq Composite (^IXIC) led gains, up roughly 1.5%, as all three gauges eyed a comeback from Thursday's closing losses.

Spirits turned buoyant as a day of reckoning for rate-cut bets finally arrived, after a week of mounting anticipation for what Powell would reveal during a speech Friday morning at Jackson Hole.

Speaking at the Kansas City Fed's annual economic symposium in Jackson Hole, Powell said: "The time has come for policy to adjust."

"The direction of travel is clear," Powell added, "and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks."

Slowing economic data has convinced the market to position for the Fed to lower rates in September, with opinion divided on the depth of the cut. Traders are pricing in a 75% chance of a reduction of 25 basis points and 25% odds of 50 basis points, per CME's FedWatch tool.

Read more: Fed predictions for 2024: What experts say about the possibility of a rate cut

The benchmark 10-year Treasury yield (^TNX) was down to around 3.84% in early trading.

Meanwhile, investors absorbed the surprise departure of Nestle (NSRGY, NESN.SW) CEO Mark Schneider, which put pressure on shares in the world's biggest foodmaker.