The Dow Jones Industrial Average staged a surprising and stunning comeback on Tuesday, climbing 512 points mainly on positive assurances from the U.S. Federal Reserve.

The Dow jumped 512.40 points or by 2.1 percent to 25,332.18. The S&P 500 improved 2.1 percent to 2,803.27 while the NASDAQ Composite surged 2.7 percent to 7,527.12. Analysts said Tuesday’s performance was the three indices second-best day so far this year since Jan. 4.

Tuesday’s surge was triggered by Fed chairman Jerome Powell, who said the Fed is open to easing monetary policy to rescue the economy amid trade tensions. It was also fueled by rumors, however unlikely, Republican senators stand ready to block president Donald Trump’s move to implement new tariffs on Mexico starting June 10.

Powell said the Fed will “act as appropriate to sustain the expansion.” On the other hand, he said the Fed doesn’t know “how or when” global trade tensions stoked by Trump will be resolved.

“We are closely monitoring the implications of these developments for the U.S. economic outlook,” said Powell at a monetary policy conference in Chicago.

“As always, we will act as appropriate to sustain the expansion,” he said.

Powell's remarks come only a day after St. Louis Fed President James Bullard said the Fed might soon cut interest rates amid concerns about weak inflation and risks to U.S. economic growth.

Speculation about a Fed rate cut is growing in light of Trump’s incessant use of tariffs to force trade negotiations. The CME FedWatch tool estimates a 90% chance of a September rate cut. Expectations for a second rate cut in December are above 80%.

Analysts said the market has long wanted to hear from Powell.

“When Powell says ‘we are watching the market’ -- whether it’s right or wrong -- the market starts believing in a Powell put,” said Keith Lerner, chief market strategist at SunTrust Private Wealth. He also noted “sentiment became extremely negative on a short-term basis.”

Tuesday’s flood of positive news is welcome respite from the pounding stocks have taken over the past four weeks. The S&P 500 fell more than 5% over this time, while the Dow shed 4.6%. The NASDAQ, meanwhile, is down more than 8% in the past month, and now stands in correction territory.

The 10-year Treasury note yield also rose after falling to its lowest level in 20 months on Monday.

Jerome_Powell A file photo of Federal Reserve Chairman Jerome Powell delivering the Federal Reserve's Semiannual Monetary Policy Report to the Senate Banking Committee on February 26, 2019 in Washington, DC. Photo: Joshua Roberts/Getty Images