Stocks reached record highs Wednesday after testimony from Federal Reserve Chair Jerome Powell bolstered the case for easier monetary policy in the U.S.

The S&P 500 briefly broke above 3,000 for the first time, while the Nasdaq Composite and Dow Jones Industrial Average also reached all-time highs.

"I think it's safe to say Powell has his dove hat on and a quarter [rate] cut is coming," said Mike Loewengart, vice president of investment strategy at E-Trade. "What's interesting though is how quickly Powell pointed abroad to support the case for a weakening economy. Because the reality is things are still pretty strong here at home—last week's jobs numbers made that clear."

In testimony to the House Financial Services Committee, Powell said business investments across the U.S. have slowed "notably" recently as uncertainties over the economic outlook linger.

"Crosscurrents have reemerged," Powell said. "Many FOMC participants saw that the case for a somewhat more accommodative monetary policy had strengthened. Since then, based on incoming data and other developments, it appears that uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook."