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WASHINGTON — Federal Reserve chairman Jerome Powell signaled Wednesday that the Fed could soon cut interest rates, sending stocks higher as the benchmark S&P 500 stock index briefly traded above 3,000 for the first time.

Powell, testifying before the House Financial Services Committee, highlighted ongoing risks to the US economy from President Trump’s trade war and a global economic slowdown, suggesting a cut may be likely when the Fed meets again later this month.

That the Fed is considering a rate cut at a moment when the US economy is strong and job market gains are solid underscores Powell and his colleagues’ concern about the future of a record economic expansion. The Fed expects unemployment to remain low and inflation to gradually increase, but Powell said that “uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the US economic outlook.”

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The Fed, which has not cut rates since slashing them nearly to zero during the financial crisis, has been under pressure from Trump to lower borrowing costs. The president has called the Fed the biggest risk to the US economy and has said repeatedly that Powell does not know what he’s doing.

“Let’s take a look at the economy and let that be the report card,” Powell said when asked about the president’s criticism, pointing to the record-long expansion and low unemployment.

Powell has insisted that the Fed will not bend to political pressure and will do what is needed to sustain the expansion. His testimony pushed markets higher as investors ignored possible economic storm clouds and cheered the increased likelihood that the Fed will soon lower borrowing costs.

Falling interest rates lift stocks for several reasons, even when they come amid mounting economic risks. They lower the returns on new investments in bonds, the main alternative to stocks for many investors. That makes stocks look more attractive to investors. A rate cut also makes it cheaper for consumers and companies to borrow, and that can buck up economic activity and help corporate profits.

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The S&P 500 is up 19.4 percent in 2019, after already enjoying one of the longest bull markets on record. Since the climb began in March 2009, the index has more than quadrupled. Stocks closed higher, though the S&P had retreated to 2,993.07 by the end of trading.

“You’ve got some modest growth, you’ve got moderate inflation, you’ve got a decent labor market, and you’ve got valuations in the market that aren’t stretched,” said Scott Wren, senior global equity strategist at the Wells Fargo Investment Institute.

What is worrying the Fed now are looming risks to the economy. Powell told lawmakers that “uncertainties about the outlook have increased in recent months,” adding that “a number of government policy issues have yet to be resolved, including trade developments, the federal debt ceiling, and Brexit,” referring to Britain’s negotiations to exit the European Union.

The federal debt ceiling may need to be raised early this fall for the government to borrow more money and avoid default.

The United States and China have agreed to restart trade negotiations, but Powell said that did not eliminate the economic risks emanating from the dispute, which has begun to hurt confidence and business spending around the globe. Trump has already placed tariffs on $250 billion worth of Chinese goods and China has retaliated against American products. A resolution is far from certain.

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“We’ve agreed to begin discussions again with China — while that’s a constructive step, it doesn’t remove the uncertainty,” Powell said, adding that a strong June jobs report did not change the outlook on interest rates. “The uncertainties around global growth and trade continue to weigh on the outlook,” he said. “In addition, inflation continues to be muted.”

Investors fully expect a cut of a quarter-percentage point at the Fed’s July 30 to July 31 meeting, and bets that the move could be as big as half a percentage point climbed Wednesday.

Powell did not explicitly say a rate cut is coming, but he pointed to mounting economic concerns and made no effort to walk back market pricing for expectations of a cut this month. He also did not rule out the possibility of a larger cut when given the chance to do so.

If the Fed lowers borrowing costs, the move may please the president. Trump has been jawboning the Fed to cut rates for months, aiming a barrage of tweets and comments at the central bank.

Powell reiterated that he was not acting at the behest of political pressure, which has included reports that the White House has looked into demoting him from chair to a Fed governor.

Asked by a lawmaker what he would do if Trump tried to fire him, Powell responded that he would not step down. “Of course I would not do that,” Powell said. “My answer would be no.”

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He added that “the law clearly gives me a four-year term, and I fully intend to serve it.”

Political pressures aside, tepid price gains are making a rate cut more likely.