Wall Street believes the case for the Federal Reserve's next move to be a rate cut - is getting stronger by the day.

Investors on Tuesday increasingly betting the Fed will lower its key interest rate as early as the upcoming meeting next month.

Federal Reserve Chairman Jerome Powell in a speech Tuesday did little to change that view.

SOUNDBITE: FEDERAL RESERVE CHAIRMAN JEROME POWELL (ENGLISH) SAYING: "I'd first like to say a word about recent developments involving trade negotiations and other matters.

We do not know when these issues will be resolved.

We are closely monitoring the implications of these developments on the economic outlook and as always we will act as appropriate to sustain the expansion with a strong labor market and inflation near our 2 percent objective." It's that phrase "act as appropriate" that has many Fed watchers believing the chairman has now left the door open for a rate cut.

Fear over an economic slowdown has been steadily building as President Trump piles on possible tariffs on Mexican imports, on top of those already imposed on Chinese made goods.

JP Morgan Chase predicts the Fed will have to cut rates twice this year to offset the impact of the tariffs on two of America's biggest trading partners.

Barclays is even more concerned, warning the Fed will have to slash rates three times in 2019.

If the Fed indeed follows suit, that would be a complete turnaround from policymakers' views at the start of the year, when the Fed was forecasting at least two rate hikes by December.

Rising optimism for a rate cut pushed stocks up more than a full percent Tuesday.