(Adds U.S. market open, byline, dateline; previous LONDON)
* S&P, Nasdaq hit new record highs after Powell remarks
* Oil surges on China demand, signs that Iran supply curbed
* Dollar dips as Powell reaffirms rate-hike policy
By Herbert Lash
NEW YORK, Aug 24 (Reuters) - Global equity market rose on Friday after Federal Reserve Chairman Jerome Powell expressed no surprises in a key speech outlining a steady course for monetary policy, while oil prices surged on signs Iran sanctions may constrain worldwide supply.
The benchmark S&P 500 and the Nasdaq hit all-time highs after Powell's comments at an annual meeting of central bankers did little to change market expectations of an interest rate hike in September and perhaps again in December. dollar weakened as Powell, speaking in Jackson Hole, Wyoming, said a gradual approach of raising rates remains appropriate to protect the U.S. economy and keep job growth as strong as possible with inflation under control.
The dollar index .DXY fell 0.58 percent, while the euro and Japanese yen rose against the greenback. MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.55 percent while it's emerging market index .MSCIEF rose 0.33 percent.
The Fed is very confident in the U.S. economy and Powell indicated there is no intention of slowing down the Fed's rate hikes, said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina.
"We are seeing some of the more cyclical sectors like energy, materials, continuing to move higher on the expectation that the Fed is going to let the economy run a little hot," Zaccarelli said.
The energy sector .SPNY jumped 1.19 percent, the most among the 11 S&P sectors. The materials sector .SPLRCM gained 1.41 percent. Europe, the pan-European FTSEurofirst 300 index .FTEU3 of regional shares closed up a preliminary 0.12 percent. .EU
On Wall Street, the Dow Jones Industrial Average .DJI rose 139.04 points, or 0.54 percent, to 25,796.02. The S&P 500 .SPX gained 16.57 points, or 0.58 percent, to 2,873.55 and the Nasdaq Composite .IXIC added 66.29 points, or 0.84 percent, to 7,944.75. economic growth, strong earnings and low interest rates have combined to continue to move the U.S. equity market higher, said Leo Grohowski, chief investment officer for BNY Mellon Wealth Management.
"The market's not cheap, but it's not as demandingly valued as many think it should be given that we continue to reach new highs," he said. "I'm very encouraged by the market's ability to look through the disturbing political headlines of the week."
U.S. Treasury prices gave back earlier losses after Powell made the case for further rate increases.
Benchmark 10-year U.S. Treasury notes US10YT=RR fell 2/32 in price to yield 2.828 percent, after rising to 2.850 percent before Powell's speech. yield curve between two-year and 10-year notes US2US10=TWEB narrowed to 20 basis points, the flattest since 2007. An inverted yield curve in the past has pointed to a recession will occur within two years.
Oil prices surged, rising almost 2 percent, on signs that Iran sanctions may limit global supply and that a trade war may not curb China's appetite for U.S. crude.
Benchmark Brent crude oil LCOc1 rose $1.45 a barrel to $76.18. U.S. crude CLc1 gained $1.31 at $69.14.
The euro EUR= rose 0.72 percent to $1.162 while the Japanese yen JPY= strengthened 0.05 percent versus the greenback at 111.25 per dollar.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ GRAPHIC-Global assets in 2018
http://tmsnrt.rs/2jvdmXl GRAPHIC-Emerging markets in 2018
http://tmsnrt.rs/2ihRugV GRAPHIC-World FX rates in 2018
http://tmsnrt.rs/2egbfVh GRAPHIC-MSCI All Country World Index Market Cap
http://tmsnrt.rs/2EmTD6j INTERACTIVE GRAPHIC: The long U.S. bull run in context
http://graphics.thomsonreuters.com/testfiles/bull-run/
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