Stock markets worldwide surged on Wednesday after major central banks hinted they may hold interest rates steady, offering relief to investors who had braced for further monetary tightening amid persistent inflationary pressures.

The S&P 500 climbed 1.8 percent, its strongest single-day gain in three months, while the Nasdaq Composite rose 2.4 percent as technology stocks led the charge. European indices also posted solid gains, with the FTSE 100 adding 1.2 percent and Germany's DAX rising 1.6 percent.

Federal Reserve Chair signaled in prepared remarks that the central bank would take a data-dependent approach going forward, a phrase markets interpreted as an implicit pause in the hiking cycle that has pushed the federal funds rate to a 22-year high.

"The committee is acutely aware that monetary policy works with long and variable lags," the statement read, "and that the full effects of our tightening have yet to be felt."

Bond markets reacted swiftly, with the yield on the benchmark 10-year Treasury note falling 14 basis points to 4.42 percent, its largest single-day drop since March. The dollar index slipped 0.7 percent against a basket of major currencies.