Bernanke returned to Capitol Hill to testify before the Senate Banking Committee on the economy and QE after reassuring the markets Wednesday that there was no concrete timetable for the Fed to scale back its bond purchase program.
"Our asset purchases depend on economic and financial developments, but they are by no means on a preset course," Bernanke said in his statement to the U.S. House of Representatives Financial Services Committee.
Bernanke also emphasized that there could be a lengthy time-lag between the end of asset purchases and a hike in interest rates.
"People are finally figuring out the Fed's inability to raise interest rates," said Lance Roberts, CEO and Chief Strategist of StreetTalk Advisors. "The big consensus seems to be that tapering will happen sometime by year-end, but the economic traction so far just isn't there."
Roberts warned that stocks may have run too far too fast and expects a sizable correction in the second half as "fundamentals play catch up" after the QE-induced rally.
The FOMC is scheduled to meets on July 30-31 and September 17-18. Bernanke is expected to hold a news conference following the September meeting.
On the economic front, weekly jobless claims dropped by 24,000 to a seasonally adjusted 334,000, according to the Labor Department, to its lowest level in four months. Economists polled by Reuters expected first-time applications to fall to 345,000 last week.
Business activity in the mid-Atlantic region jumped to its best level since March 2011, according to the Philadelphia Federal Reserve, with the index at 19.8 in July, versus 12.5 in the month prior. Any reading above zero indicates an expansion.
And leading indicators, a gauge of future U.S. economic activity, was flat at 95.3 in June, hovering around a five-year high, according to the Conference Board. Economists polled by Reuters had expected a 0.3 percent gain after a previously reported 0.1 percent rise.
Traders also focused on a handful of earnings reports.
(Read More: Earnings: the good, the bad, and not so ugly)
Morgan Stanley spiked higher after the financial giant topped quarterly expectations as revenue grew in all of its major businesses, particularly trading and underwriting.
Elsewhere, Verizon edged past earnings expectations by a penny a share, thanks to strong growth at its Verizon Wireless venture with Vodafone Group. Fellow Dow component UnitedHealth gained after the health insurance giant beat forecasts as more people signed up for plans.
IBM gained after the tech giant posted earnings that topped expectations and raised its full-year outlook, though the company missed on revenue.