Germany's DAX edged less than 0.1% higher to 12,377.95 and the CAC 40 in France added 0.2% to 5,577.95. Britain's FTSE 100 picked up 0.2% to 7,546.21. Wall Street looked set to extend its winning streak, with the future contract for the Dow Jones Industrial Average up 0.2% to 26,909.00. The future for the S&P 500 also gained 0.2%, to 3,003.00.
The Fed chairman told Congress in his semi-annual report that many in the U.S. central bank believe a weakening global economy and rising trade tensions have strengthened the case for a rate cut. That allayed investors' concerns that unexpectedly strong U.S. jobs data reported Friday might give the Fed reason to stay put on interest rates.
In Asia, Hong Kong's Hang Seng jumped 0.8% to 28,431.80, while the Shanghai Composite index edged 0.1% higher to 2,917.76. In Japan, the Nikkei 225 index climbed 0.5% to 21,643.53 and South Korea's Kospi advanced 1.1% to 2,080.58. Australia's S&P ASX 200 gained 0.4% to 6,716.10. Shares also rose in Taiwan and Southeast Asia.
"Local equity markets are reveling in the best of both worlds this morning as local investors love nothing more than lower U.S. interest rates and a weaker U.S. dollar," Stephen Innes of Vanguard Markets said in a commentary.
The U.S. stock market rallied through much of June after the Fed first signaled that it might cut rates if necessary to shore up the U.S. economy.
In his prepared statement, Powell said that since Fed officials met last month, "uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook." Meanwhile, inflation has fallen farther from the Fed's target.
The Fed's benchmark rate currently stands in a range of 2.25% to 2.5% after the central bank raised rates four times last year. Many investors have put the odds of a rate cut this month at 100%.
A quarter-point cut in interest rates, which many investors expect, isn't likely to have a big impact on consumers' credit cards or mortgage rates. But it would reassure markets that the Fed would be open to further rate cuts if more signs of weakness in the global economy emerge.
Powell is due to appear before the Senate Banking Committee on Thursday. In the meantime, U.S. consumer inflation data are a focus for traders later Thursday.
Investors will have to wait until the end of the month to see what action the Fed takes on interest rates at its next meeting of policymakers.
Retaliatory tariffs remain another worry for markets.
While China-US trade tensions have calmed with a resumption of talks by phone between top envoys, friction with France looms after President Donald Trump's administration launched an investigation into French plans for a special tax targeting big tech companies.
Energy: Benchmark U.S. crude oil picked up 33 cents to $60.76 per barrel in electronic trading on the New York Mercantile Exchange. On Wednesday, it jumped $2.60 to settle at $60.43 a barrel, the highest level since late May.
Brent crude oil, the international standard, added 40 cents to $67.41 per barrel. Overnight, it gained $2.85 to close at $67.01 a barrel.
Currencies: The dollar fell to 108.10 Japanese yen from 108.45 yen on Wednesday. The euro strengthened to $1.1268 from $1.1250.
END/AP/UNB/KC