In testimony before congress, Bernanke said the Fed would consider several options to get the economy going again. The Fed could start a third bond-buying program to keep interest rates low. It could also cut the interest rates for banks to encourage lending. The Fed would only act if weakness in the U.S. economy persists.
The Standard & Poor's 500 rose 14, or 1.1 percent, to 1,328 in morning trading. The Dow Jones industrial average rose 139 points, or 1.1 percent, to 12,586. The Nasdaq composite rose 30, or 1.1 percent, to 2,812.
Stocks started the day higher after China reported strong economic growth in the second quarter.
The Chinese economy grew at a slower but still healthy rate of 9.5 percent last quarter, data showed Wednesday. China is attempting to rein in its speeding expansion and ease inflation, but a sudden drop-off in growth could hurt the U.S. economy by cutting into demand for U.S. exports.
Analysts expect Bernanke to urge lawmakers raise the U.S. borrowing limit before Aug. 2. If Democrats and Republicans can't make a deal by that deadline, the U.S. could fail to pay its debt for the first time in history. More likely than an immediate default, however, is a temporary halt to benefits like social security or military pay.
Congress and the White House will face more pressure to agree on a long-term plan to cut spending when the government reports on the federal budget deficit at 2 p.m. Eastern. Analysts expect the deficit to be above $1 trillion for the third year in a row.
Kinetic Concepts Inc. rose 5 percent in premarket trading after it announced that a private equity company would buy the maker of wound care products for $4.98 billion.
After the market closes, fast-food giant YUM Brands Inc. and hotel chain Marriot International Inc. are expected to report earnings.