Powell played up concerns about global risks in trade tensions, as well as the Brexit process, and heavily signalled that the bank would cut interest rates during its policy decision later this month.
The benchmark S&P 500.SPX has climbed about 19% this year and crossed the 3,000 point mark for the first time.
Powell cited weak inflation, along with trade-related uncertainty as factors that could compel the Fed to take action later this month to ensure the U.S. economy stays strong. The Fed's key rate, which influences many consumer and business loans, now stands in a range of 2.25% to 2.5%.
"Everyone expected him to cut in July", said Maris Ogg of Tower Bridge Advisors, who thinks the Fed will undertake a 25 basis point cut in interest rates this month.
Powell also cited uncertainties about trade and the global economy as threats to USA economic growth during his Wednesday testimony.
In the Fed's monetary policy report issued last week ahead of Powell's testimony, the trade war received its own analysis, a sign of the attention it is getting within the central bank.
The FOMC minutes were published at the same time and most of the members thought that rising risks from global concern and flagging business confidence supported a rate cut, but that such a cut would "risk financial imbalances".
The Dow also hit an intraday record and the Nasdaq closed at an all-time high following the release of prepared remarks for Powell's testimony before the US House of Representatives Financial Services Committee.
Asked by Democratic Rep. Maxine Waters, chair of the House Financial Services Committee, whether he would pack up and leave if the president called to say he was sacked, Powell said, "Of course I would not do that".
Powell is also due to present testimony to the Senate Banking Committee overnight. "The law clearly gives me a four-year term and I fully intend to serve it".
The president has repeatedly accused Powell and the Fed of keeping credit too tight for too long and of thereby holding back the economy and the stock market.
The economy remains generally in "a good place", he said, and consumer spending remains robust. Economists expect the reduction will likely be a quarter-point. "There was little in the statement to imply what this means past the July meeting, but we can infer that any further softening in the data past July will likely mean more action from the Fed at subsequent meetings".
That change reflects two developments.
Powell has been heavily criticised by President Donald Trump, but last night insisted he will not be forced out of the job.
Yet, some market participants have scaled back expectations that a July cut is nearly a certainty after a 224,000-strong jobs growth in June signaled the economy may be too strong for an easing.
TRADE TENSIONS: Retaliatory tariffs remain a worry for markets.
Though the USA government reported strong job growth for June, other major economies' "data have continued to disappoint".