The Dow Jones Industrial Average rebounded sharply on Friday after New York Federal Reserve President John Williams suggested that another interest rate cut could arrive before the end of the year. His remarks, delivered during a speech in Santiago, Chile, reassured investors that the central bank may continue easing monetary policy at its December meeting.

The Dow jumped 493.15 points, or 1.08%, closing at 46,245.41. The S&P 500 climbed 0.98% to 6,602.99, while the Nasdaq Composite advanced 0.88%, ending at 22,273.08. Williams said monetary policy remains “modestly restrictive,” but added that there is still “room for a further adjustment” to bring interest rates closer to neutral.

Following his comments, traders sharply increased their expectations of a December rate cut. According to the CME FedWatch tool, the probability of a quarter-point cut surged from under 40% to more than 70% in a single day. Investors quickly rotated into stocks poised to benefit from lower borrowing costs, including Home Depot, Starbucks and McDonald’s.

The optimism helped markets recover from Thursday’s brutal reversal, when major averages tumbled despite Nvidia’s strong earnings. Even with Friday’s rally, however, all three major indexes posted weekly losses: the S&P 500 and Dow fell around 2%, while the Nasdaq dropped 2.7%.

Analysts say the recent volatility reflects a typical post-earnings pullback, particularly in overheated parts of the market. Bitcoin also slumped more than 2% on Friday, deepening its weekly loss to nearly 11% as risk appetite continues to fade.

Looking ahead, investors see the next U.S. employment report as the key factor determining whether the Fed follows through with another rate cut. As Infrastructure Capital Advisors CEO Jay Hatfield put it, the only remaining question for markets is how far the downturn will go before stabilizing.