European stocks finished with losses Tuesday, as investors took a cautious approach ahead of U.S. Federal Reserve Chairwoman Janet Yellen's testimony to Congress. The pan-European index traded with a gain of as much as 0.3% just after the open, but the optimism quickly fizzled.

U.S. stocks closed higher on Wednesday with the Dow industrials setting its first closing record in nearly a month as Federal Reserve Chairwoman Janet Yellen emphasized the central bank's gradual approach to normalizing monetary policy and expressed optimism about the economy in congressional testimony.

Global equities extended their rally in Asia on Thursday, as dovish comments from Federal Reserve Chairwoman Janet Yellen improved risk-taking appetite. In her testimony on Capitol Hill, Yellen signaled that the Fed would take a cautious approach to tightening policy in the face of an uncertain inflation outlook. She said the Fed would continue to raise interest rates gradually, though it would change plans if inflation weakness persisted.