US Treasury yields dipped as Yellen's speech at an annual meeting of central bankers in Jackson Hole, Wyoming, relieved some investors who had expected hawkish comments on the economy.
Reforms that followed the 2007 to 2009 crisis had strengthened the financial system without impeding economic growth, and future changes should be modest, Yellen said in prepared remarks.
"She didn't say anything that the market wanted to know about Fed policy," Marc Chandler, chief global currency strategist at Brown Brothers Harriman & Co.
"It's seen the 10-year yield slip and has seen the dollar weaken. It was not that she said anything bullish for foreign currencies; it was that she didn't say anything positive for the US," Chandler said.
MSCI's index of stocks across the globe pared some gains to edge up 0.32 percent.
US stocks climbed, though the tech-heavy Nasdaq was dragged lower by Broadcom Ltd after it reported results.
European share markets closed lower, with the pan-regional FTSEurofirst 300 index slipping 0.05 percent, even as an index of emerging market stocks rose.
"People had hoped for some excitement. The bond market is rallying with at least some people thinking (Yellen) would make the case for more rate hikes to take some steam out of the stock market," said Chris Low, chief economist at FTN Financial in New York.
Benchmark 10-year US Treasury notes rose 5/32 in price, pushing the yield down to 2.1781 percent.
The dollar index fell 0.53 percent, with the euro up 0.64 percent to $1.1873 and the Japanese yen gaining 0.27 percent versus the greenback to 109.27 per dollar.
The Dow Jones Industrial Average rose 43.44 points, or 0.2 percent, to 21,826.84. The S&P 500 gained 5.4 points, or 0.22 percent, to 2,444.37 and the Nasdaq Composite dropped 4.05 points, or 0.06 percent, to 6,267.28.
All 11 major S&P sectors rose, except for technology. The S&P 500 and the Dow were on course to snap a two-week losing streak.
Also helping sentiment on Wall Street was a report that said US President Donald Trump will turn his attention to his campaign promise of implementing tax reform.
National Economic Council Director Gary Cohn told the Financial Times that starting next week Trump's agenda and calendar is going to revolve around tax reform.
Mario Draghi, president of the European Central Bank, was scheduled to speak later in the afternoon at Jackson Hole.
The Atlanta Fed's GDP Now forecast model showed the US economy is on track to grow at a 3.4 percent annualized pace in the third quarter based on the latest data on industrial output, home sales and durable goods orders.
Oil prices rose as the dollar fell and as the US petroleum industry braced for Hurricane Harvey, which could become the biggest storm to hit the US mainland in more than a decade.
US crude rose 0.4 percent to $47.62 per barrel and Brent was last at $52.14, up 0.19 percent on the day.