WASHINGTON (AP) — Chairman Jerome Powell said Tuesday that the Federal Reserve is prepared to respond if it decides the Trump administration's trade conflicts are threatening the U.S. economy. Investors read his remarks as a signal that the Fed will likely cut interest rates later this year.

Powell's remarks helped drive up stock prices, with the Dow Jones Industrial Average ending the day up more than 500 points, or 2%.

Speaking at a Fed conference in Chicago, Powell said, "We are closely monitoring the implications of these developments for the U.S. economic outlook and, as always, we will a...