Wall Street is rallying on Friday after the head of the Federal Reserve indicated cuts to interest rates may be coming, though he gave no clear clue about when.

Federal Reserve Chair Jerome Powell carefully opened the door to an interest-rate cut in September, pointing to rising risks for the labor market even as worries over inflation remain.

Jerome H. Powell said the “balance of risks” across the economy had started to shift, raising the odds the central bank lowers borrowing costs at its next meeting in September.