Morgan Stanley has joined a growing bloc of global brokerages forecasting a September interest rate cut by the U.S. Federal Reserve, citing Chair Jerome Powell's shift in tone toward labor market risks at the Jackson Hole symposium.

Federal Reserve chairman Jerome Powell signaled a possible interest rate cut in the months to come, sending stocks sharply higher.

Federal Reserve Chair Jerome Powell said the Federal Reserve may cut interest rates, raising expectations the central bank will lower the fed funds rate when its policy committee next meets in September.