The Stoxx 600 fell below the flat line by the close of play Friday, with most sectors trading in negative territory. The pan-European benchmark was 0.2 percent higher on the week, while the FTSE, German Dax and French CAC were little changed.
Meanwhile, stocks in the U.S. turned mixed after Yellen gave little indication of when investors could expect to see the next interest rate hike.
The central bank chair said that increased regulation was an appropriate response to the financial crisis and insisted that the Fed remains committed to making reforms and improvements to maintain financial stability.
In Europe, basic resources were one of the few sectors to remain in the black, buoyed by higher copper prices.
Autos stocks were also higher after Fiat said Friday that it would assess any offer for the Italian-American car maker though it did not comment on previous reports that Great Wall Motor was interested in Jeep. The stock was up by 1.6 percent in early deals but slumped lower by 0.7 percent in afternoon deals.
Provident Financial took over the top of the European benchmark up by more than 22 percent following news that it reorganized its consumer credit unit. Earlier this week, the subprime lender saw its stock slump more than 75 percent after a profit warning. Investment manager SimCorp was also more than 4 percent higher by the close of play after announcing a $8.8 million share buyback program.
On the other end, the retail sector was the worst performing group, down by more than 1 percent. Food retailers, including Ahold Delhaize, Carrefour and Tesco were sharply lower after Amazon said it would cut prices at Whole Foods.
The Dutch grocer fell as much as 6.1 percent given its strong presence on the east coast. The e-commerce giant bought the chain for about $14 billion – a merger that is set to shake up the market for grocers.
European Central Bank President Mario Draghi is due to address the Jackson Hole economic symposium at around 8 p.m. London time.
Investors are carefully following what central bankers are saying at the symposium as they have increasing doubts over the next steps for monetary policy. On Friday, a Moody’s economist told CNBC that the Fed has a lot to do to convince the market that more hikes are on the way.
In the corporate world, Rusal said Friday it expects a 5.9 percent demand growth for all 2017. Its earnings in the first half of 2017 surged 80 percent, Reuters reported.
In South Korea, Lee Jae-yong, the vice chairman of Samsung was found guilty of corruption and sentenced five years in prison. His legal team said it would appeal.
And Spotify has cleared a legal hurdle and is closer to be publicly listed, the Financial Times reported.
In Germany, new data showed the economy expanded 0.6 percent in the second quarter of the year on strong private consumption and state spending.
“Leading indicators suggest that domestic demand will continue to perform strongly in the second half of the year, but we think the quarter-on-quarter run-rate in headline GDP (gross domestic product) growth will slow to 0.4 percent-to-0.5 percent quarter-on-quarter,” Claus Vistesen, chief euro zone economist at Pantheon Macroeconomics, said in an email.
In another survey, the IFO Institute said Friday that the German economy doesn’t risk overheating and has more room for growth, despite a small drop in business confidence.
Meanwhile, in France, consumer confidence dropped in August as households doubt over their capacity to save.