Stocks were mixed by late afternoon Wednesday as a dovish Federal Reserve boosted the S&P 500 and Nasdaq, while disappointing earnings from Walt Disney (DIS) helped turn the Dow Jones Industrial Average lower.
The S&P 500 was up 0.56%, the Dow was down 0.05%, and the Nasdaq rose 1.1%.
The markets interpreted comments from Fed Chair Janet Yellen to mean a rate hike in March is off the table. Yellen issued the central bank's semiannual monetary policy report to the House Financial Services Committee on Wednesday and will speak to the Senate Banking Committee on Thursday.
In prepared remarks released before her testimony, Yellen said monetary policy was not on a "preset course" and that she expects gradual rate hikes. Yellen noted that lower interest rates and oil prices could offset tighter financial conditions, though noted recent activity in financial markets "have become less supportive to growth."
"As is always the case, the economic outlook is uncertain," said Yellen. "Foreign economic developments, in particular, pose risks to U.S. economic growth," she added, pointing to recent signs of a global slowdown and subsequent market turbulence.
Analysts took that to mean a rate hike next month was likely off the table. The Fed raised rates for the first time in nearly a decade in December.
"Ultimately, Yellen concluded that policy is not on a preset course and must remain data dependent," Societe Generale's Aneta Markowska wrote in a note. "Given the Fed's outlook for the economy the bias remains toward further hikes, but their timing will be highly dependent on financial market developments."