US STOCKS-Wall Street rebounds on U.S. rate cut hopes

* Powell says Fed to react 'as appropriate' to trade war
risks
* Nine of 11 major S&P sectors higher
* Five sectors rise more than 2%; utilities, real estate
fall
* Indexes up: Dow 1.8%, S&P 500 1.8%, Nasdaq 2.3%

(Updates prices to late afternoon, adds commentary, New York
dateline; changes byline)
By Sinéad Carew
New York June 4 (Reuters) - U.S. stocks rallied on Tuesday,
with the S&P 500 set for its biggest one-day gain in five
months, after Federal Reserve Chair Jerome Powell said the
central bank would act "as appropriate" to address trade war
risks, leaving the door open for a possible rate cut.
A day after St. Louis Fed chief James Bullard said a rate
cut may be warranted soon, Powell said the Fed was "closely
monitoring the implications" of a trade dispute that has
disrupted global markets and posed risks to growth. The last time the benchmark S&P index, last up 1.8%, had a
bigger daily percentage gain was on Jan. 4, when Powell said the
Fed would be patient and flexible in its interest rate path.
"When the market's been down as much as it has been, all you
need is a little bit of a spark," said Paul Nolte, portfolio
manager at Kingsview Asset Management in Chicago.
"There is some sense from what we heard from Powell and
Bullard that the Fed is thinking about making monetary policy a
little easier by cutting rates."
The S&P 500 shed more than 6% in May as investors feared a
global growth slowdown while trade tensions ramped up between
the United States and China and the United States and Mexico.
Nolte said investors were also encouraged after Mexican
President Andres Manuel Lopez Obrador told reporters on Tuesday
that he was optimistic that a deal could be reached even as U.S.
President Donald Trump said he was likely to go ahead with new
tariffs on all Mexican goods. A Washington Post report that Republican lawmakers were
discussing whether they may have to vote to block President
Trump's planned new tariffs on Mexico also helped sentiment.
Earlier in the day, China's commerce ministry said the
differences and frictions with Washington should be resolved
through dialogue. At 3:08PM ET, the Dow Jones Industrial Average .DJI rose
453.59 points, or 1.83%, to 25,273.37, the S&P 500 .SPX gained
50.28 points, or 1.83%, to 2,794.73 and the Nasdaq Composite
.IXIC added 167.89 points, or 2.29%, to 7,500.90.
The tech-heavy Nasdaq's rebound came after it confirmed a
correction on Monday, having lost more than 10.3% since its
record closing high on May 3. The S&P 500 on Tuesday was less
than 6% below its intraday record high hit on May 1.
The technology sector .SPLRCT was fueling the S&P's gains
with a 2.8% advance, led by gains in Apple Inc AAPL.O and
Microsoft MSFT.O .
Other marquee companies - Amazon.com AMZN.O and
Google-parent Alphabet Inc GOOGL.O also rebounded from
Monday's selloff, which was triggered by fears of heightened
scrutiny from antitrust regulators.
Rising U.S. Treasury yields boosted the S&P 500 bank index
.SPXBK , which jumped 3.06% and was on course for its biggest
one-day gain in five-months. US/
Only the dividend-paying utilities .SPLRCU and real estate
.SPLRCR sectors, typically seen as defensive bets, were in the
red for the day.
The S&P 500 posted 25 new 52-week highs and 1 new lows; the
Nasdaq Composite recorded 39 new highs and 69 new lows.