Stock indices closed higher on the Fed Chairwoman Janet Yellen's testimony. Yellen said in her prepared remarks before the House Financial Services Committee on Wednesday that further interest rate hikes will depend on the incoming economic data, adding that interest rate hikes will be gradual.
She noted that there is a risk from developments abroad to the U.S. economy.
"The economic outlook is uncertain. Foreign economic developments, in particular, pose risks to U.S. economic growth," Yellen said.
The Fed chairwoman also said that "financial conditions in the United States have recently become less supportive of growth".
She expects inflation to reach 2% target over the medium term, while the labour market is expected to continue to strengthen. Regarding the U.S. labour market, Yellen added that there remained some slack in labour markets.
Meanwhile, the economic data from Eurozone was weak. The French statistical office Insee its industrial production figures on Wednesday. Industrial production in France declined 1.6% in December, missing expectations for a 0.2% increase, after a 0.9% fall in November. It was the biggest drop since May 2014.
Manufacturing output decreased 0.8% in December, while construction output slid 1.6%.
On a yearly basis, the French industrial production climbed 2.0% in December, after a 2.8% gain in November.
The Italian statistical office Istat released its industrial production data on Wednesday. Industrial production in Italy fell at a seasonally-adjusted rate of 0.7% in December, after a 0.5% decline in November.
On a yearly basis, industrial production in Italy slid at a seasonally-adjusted rate of 1.0% in December, after a 1.1% increase in November. November's figure was revised up from a 0.9% gain.
The National Institute of Economic and Social Research (NIESR) released its estimate of gross domestic product (GDP) for the U.K. on Wednesday. The GDP estimate rose by 0.4% in three months to January, after a 0.5% growth in three months to December. December's figure was revised down from a 0.6% rise.
A softer growth was driven by a weakness in the production sector.
The Office for National Statistics (ONS) released its manufacturing industrial production figures for the U.K. on Wednesday. Manufacturing production in the U.K. fell 0.2% in December, missing expectations for a 0.1% gain, after a 0.3% decrease in November.
Manufacturing output was mainly driven by a drop in the manufacture of wood, paper products and printing, which plunged by 2.1% in December.
On a yearly basis, manufacturing production in the U.K. decreased 1.7% in December, missing forecast of a 1.4% fall, after a 1.2% drop in November.
Industrial production in the U.K. slid 1.1% in December, missing forecasts of a 0.1% fall, after a 0.8% rise in November. It was the biggest monthly drop since 2012.
The decline was driven by falls in mining, oil and gas extraction and manufacturing.
On a yearly basis, industrial production in the U.K. decreased 0.4% in December, missing expectations for a 1.0% rise, after a 0.7% increase in November.
Indexes on the close:
Name Price Change Change %
FTSE 100 5,672.3 40.11 0.71 %
DAX 9,017.29 137.89 1.55 %
CAC 40 4,061.2 63.66 1.59 %