U.S. stocks closed higher with the Dow hitting intraday high, as investors meditated on Federal Reserve Chair Janet Yellen's testimony Wednesday.
The Dow Jones Industrial Average added 123.07 points, or 0.57 percent, to 21,532.14. The S&P 500 gained 17.72 points, or 0.73 percent, to 2,443.25.
The Nasdaq Composite Index increased 67.87 points, or 1.10 percent, to 6,261.17.
Yellen, in a testimony prepared for delivery to the U.S. House Financial Services Committee Wednesday, said the U.S. economy should continue to expand over the next few years, allowing the central bank to keep raising interest rates.
"The committee continues to expect that the evolution of the economy will warrant gradual increases in the federal funds rate over time to achieve and maintain maximum employment and stable prices," she said.
She added that the central bank is likely to start reducing its massive 4.5-trillion-dollar balance sheet later this year.
The Fed bolstered the balance sheet as a way to stimulate the economy during and after the financial crisis.
In addition, Yellen said the Fed is monitoring low inflation as it remains one of the major uncertainties in the economic outlook. "There is, for example, uncertainty about when -- and how much -- inflation will respond to tightening resource utilization," she said.
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