A broad rally led by the technology and commodity sectors pushed Canada's main stock index higher midweek as the Bank of Canada approved its largest interest rate increase in two decades.

The S&P/TSX composite index closed up 122.61 points to 21,838.02 after hitting an intraday high of 21,888.76.

In New York, the Dow Jones industrial average was up 344.23 points at 34,564.59. The S&P 500 index was up 49.14 points at 4,446.59, while the Nasdaq composite was up 272.02 points or two per cent at 13,643.59. 

North American markets moved higher on a pullback of bond yields as the impact of high inflation seems already baked in and may have reached its peak, says Greg Taylor, chief investment officer of Purpose Investments. 

"So it feels a little bit of a relief rally because a lot of the strength we're getting is in the technology stocks which have been the most beat up more than anything else," he said in an interview.

Technology moved up 1.5 per cent, with Hut 8 Mining Corp. and Lightspeed Commerce Inc. both up 4.6 per cent.

Energy was the strongest sector on the TSX, gaining 1.7 per cent on higher crude oil and natural gas prices as Meg Energy Corp. was up 5.1 per cent.

The May crude oil contract was up US$3.65 at US$104.25 per barrel and the May natural gas contract was up 31.7 cents at US$7.00 per mmBTU. 

Energy is climbing due to supply shortfalls despite the release from strategic petroleum reserves in the U.S. and elsewhere as OPEC isn't adding more output, said Taylor.

"There's not a lot of supply that can come on the market, and that's probably setting up for an environment where oil's going to be above $100 for awhile."

He added that there's more talk about foreign investors buying up Canadian energy stocks with the return of capital keeping people really interested in the sector.

Adding to the pressure on crude prices were comments from Russian President Vladimir Putin blaming Ukraine for derailing peace talks.

The Canadian dollar was held in check even though the Bank of Canada raised interest rates by 50 basis points because the change was well-telegraphed by officials.

It traded for 79.32 cents US compared with 79.26 cents US on Tuesday. 

Materials was the next best of the seven sectors that were positive on the day.

Materials climbed 1.6 per cent on higher metals prices with Ero Copper Corp. and Teck Resources Ltd. up 7.5 and 7.1 per cent, respectively.

The June gold contract was up US$8.60 at US$1,984.70 an ounce and the May copper contract was up less than a penny at US$4.71 a pound. 

After a disappointing run last year, everyone is watching to see if gold can once again reach US$2,000 an ounce, said Taylor.

"Certainly gold is a commodity that should work in times of inflation like this," he said, noting that it's interesting it is increasing at the same time as the U.S. dollar.

"If the U.S. dollar does start to pull back, that's usually when you get your big moves in gold. So the fact it's moving higher with the U.S. dollar in tandem is really setting up for an interesting environment."

Air Canada shares increased 5.8 per cent to help industrials as North American airlines were powered higher by strong quarterly results from Delta Air Lines. The U.S. carrier forecast a return to profit in the current quarter with a pick up in airline travel demand. 

Financials was one of three laggards. It lost ground, with most Canadian banks lower on the day, after U.S. bank JPMorgan Chase & Co reported a 42 per cent drop in quarterly profit as it took a writedown due to its exposure in Russia.

The first earnings results of the quarter were generally not great, despite gains by Delta, said Taylor.

"This is really the calm before the storm and we'll see what earnings season brings to see if that can change the narrative, because it seems like it's going to be volatile for the next month or two."