Next in this housing data-heavy week is weekly mortgage applications at 7 a.m. and new home sales at 10 a.m. on Wednesday.
"We may see pickup (in new homes sales) as people coming back to the marketplace are holding out for that (new) apartment versus suburban house," said Jeff Taylor, co-founder of mortgage processor Digital Risk. He added that an improving housing market is proof of the strong wage growth and employment the Fed is watching for.
Existing home sales for January reported on Monday slumped to the lowest level in nine months amid a shortage of properties in the market.
Read MoreLow inventory may take bloom off spring home sales
On Tuesday, the S&P/Case-Shiller composite index of home prices in 20 cities increased by a greater-than-expected 4.5 percent in December from the same period last year.
Investors will also watch oil inventories at 10:30 a.m. from the U.S. Energy Information Administration for signals on supply buildup.
Retail will be another area to watch. Macy's reported earnings on Tuesday for the holiday quarter that missed expectations.
Companies reporting before the bell on Wednesday include Dollar Tree, Target and TJMaxx owner TJX. Victoria's Secret and Bath & Body Works owner L Brands reports after the bell.
Brian Yarbrough, consumer discretionary analyst for Edward Jones, has a "buy" rating on Target and TJX.
"I think the consumer environment remains OK," he said. "The lower gas price is definitely benefiting the low end a little more (than high-end retailers)."
He noted that among the sub-sectors, apparel was the weakest while accessories and footwear did better, with restaurants the best performers.
Shorter-maturity yields spiked following the statement's release.The U.S. 10-year Treasury yield initially held steady near 2.08 percent before falling to below 2 percent after the conclusion of Yellen's Senate testimony.
The decline is "another indication that this testimony was on the dovish side," said Peter Cardillo, chief market economist at Rockwell Global Capital. "The (equity) market is probably going to rally here and close the month on a strong note."
He said the S&P 500 could reach 2,125 or 2,150 this week before pulling back next month.
U.S. stocks climbed to new records amid Yellen's remarks to the Senate Banking, Housing and Urban Affairs Committee on Tuesday.
The key headline for many out of Yellen's remarks on Tuesday was the dismissal of a rate hike for "at least the next couple of FOMC meetings."
"What will be different is the Q&A process," Hogan said, noting that the "House has more 'audit the Fed' enthusiasts."
During Tuesday's question-and-answer session, a recent move in Congress for greater Federal Reserve transparency drew a strong response from Yellen, who said, "I strongly oppose audit the Fed."
The Fed funds futures indicated that the first meeting with a better-than-average chance of a rate hike is October, past earlier signals of an expected hike in September, according to CME Group data.
The Dow Jones industrial average briefly gained more than 100 points to set a new intraday record of 18,231.09, led by 4 percent gains on Home Depot.
The S&P 500 advanced to touch a new intraday high at 2,117.99. The Nasdaq closed positive at 15-year highs for its 10th consecutive day of gains.
On the European front, investors can finally put Greece in the backseat for now as the Eurogroup of finance ministers on Tuesday officially approved a four-month extension on Greece's bailout.
While equities cheered Yellen's dovish remarks on Tuesday, some analysts were less enthusiastic.
"Ultimately, Yellen didn't seem to change anyone's mind by the end of her testimony. If you previously thought recent U.S. economic data was strong enough to merit a rate hike, you probably still believe that," said OppenheimerFunds Chief Investment Officer Krishna Memani, said in a note. "All the same, if you thought there was no rush to raise rates, you're likely holding on to that view. In short, listening to the testimony was a colossal waste of everyone's time."
Read MoreWaiting for Yellen Q&A, but QE helping elsewhere
"Nevertheless, Yellen made it clear that international developments and correspondingly lower inflation would be meaningful drivers of U.S. monetary policy," Memani said.