Federal Reserve Chair Jerome Powell speaks at the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institute on Wednesday, Nov. 30, in Washington. AP-Yonhap

Wall Street stocks soared and the dollar fell Wednesday after Federal Reserve Chair Jerome Powell signaled a shift from the central bank's aggressive policy to counter inflation.

Major U.S. indices, which had been near flat prior to Powell's appearance, suddenly vaulted higher.

The gains came after European bourses also advanced on better inflation data in the eurozone.

"This was the unofficial pivot the markets have been waiting for," Forex.com's Joe Perry said of Powell's comments. "As a result of Powell's dovishness, the US dollar index sold off aggressively."

Powell, appearing at the Brookings Institution in Washington, said the Fed could ease its stance on interest rate hikes "as soon as" December when policymakers are next scheduled to meet.

He added that the full effects of the bank's rapid tightening are yet to be felt.

"Thus, it makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down," he said.

But Powell warned that policy will likely still have to remain tight "for some time" to restore price stability.

The Fed has raised the benchmark lending rate by 0.75 percentage point four consecutive times in recent months, out of six times this year, in an aggressive effort to rein in prices.

Major U.S. indices rallied after the remarks, with the Nasdaq leading the way with a 4.4 percent surge.