Canada's benchmark stock index gained on Wednesday, boosted by strong moves higher for the country's biggest banks as bond yields jumped with a more hawkish tone from the Bank of Canada.

Energy stocks pushed higher, helped by rising oil prices, while grocery operator Empire Co Ltd (EMPa.TO) added to the overall gains, jumping 10 per cent to $21.00 a share. The parent of the Sobeys grocery chain, which is in the midst of a turnaround effort, posted adjusted earnings that beat expectations and increased its dividend payout.

The Toronto Stock Exchange's S&P/TSX composite index ended up 74.36 points, or 0.49 per cent, at 15,355.58.

"We're starting to see a little bit of support" for the TSX after having underperformed U.S. indices so far this year, said Stan Wong, a portfolio manager at Scotia Wealth Management. "We could be seeing a bit of a catch up in the back half of the year" helped by energy and financial stocks as oil prices pick up and investors position for higher interest rates.

The most influential movers on the day were the big financial stocks, which rose as investors increased their bets that the country's central bank may hike interest rates as soon as next month.

Royal Bank of Canada (RY.TO) gained one per cent at $95.06 and Bank of Montreal (BMO.TO) rose 1.4 per cent to $95.58. The financials group, which accounts for over a third of the index's weight, gained 0.9 per cent overall.

Interest rate cuts in 2015 have done their job and the Bank of Canada needs to consider its options as excess capacity is used up, Bank of Canada Governor Stephen Poloz said in a CNBC interview from Europe.

On the other side of the ledger, Gildan Activewear (GIL.TO) shares fell 3.4 per cent to $40.01 after one of its directors resigned to take up the chief operating officer role at Under Armour, and as CIBC downgraded the stock to "neutral" from "outperform."

Eldorado Gold Corp (ELD.TO) lost 5.9 per cent to $3.49 after revising downward its 2017 outlook for production from its Kisladag operations in Turkey, while larger gold miners also fell.

The energy group climbed 0.8 per cent, with Canadian Natural Resources Ltd (CNQ.TO) up 1.8 per cent at $38.26, as oil prices hit their highest point in a week after a small weekly decrease in U.S. production.

Eight of the index's 10 main groups were in positive territory, with advancers outnumbering decliners by a 2.8-to-1 ratio overall.

U.S. MARKETS

Wall Street stock rallied sharply on Wednesday, with the benchmark S&P 500 index scoring its biggest one-day percentage gain in about two months, as financial and technology stocks led a broad market rebound.

The Nasdaq posted its best session since Nov. 7, the day before the U.S. presidential election.

The S&P 500 had suffered its biggest one-day drop in about six weeks on Tuesday after a healthcare bill was delayed in the U.S. Senate.

The health-care legislation is the first major plank of President Trump's domestic policy agenda, with investors eager for him to move onto his other plans including tax cuts, infrastructure spending and deregulation.

Investors may be reevaluating the impact of the Senate's delay on the market and Trump's agenda, said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey.

"The market has had trouble really appreciating, but it has had even more trouble declining," Meckler said. "It seems like any negative period is very quickly met with new buyers."

"Interest rates are still very low and a lot of investors see little opportunity to invest anywhere but in stocks," he added.

The Dow Jones Industrial Average rose 143.95 points, or 0.68 per cent, to 21,454.61, the S&P 500 gained 21.31 points, or 0.88 per cent, to 2,440.69 and the Nasdaq Composite added 87.79 points, or 1.43 per cent, to 6,234.41.

The small-cap Russell 2000 ended up 1.6 per cent.

Financials were the best performing S&P sector, rising 1.6 per cent.

Bank stocks including JP Morgan Chase (JPM.N) and Bank of America (BAC.N) helped boost the S&P 500, both rising more than 2.0 per cent. The interest rate-sensitive group was helped by an increase in yields for 10-year Treasuries and by a widening spread between shorter- and longer-dated U.S. bonds.

"We have had the statements from various Fed officials that they are still on board with the tightening cycle and that has been a big driver for finance names," said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.

Bank stocks also were higher ahead of stress test results from the Federal Reserve and added to those gains in after-hours trading as the Fed approved plans from the 34 largest U.S. banks to use extra capital for stock buybacks, dividends and other purposes.

Tech stocks gained 1.3 per cent, surging back from their worst day in more than two weeks. The sector has led the S&P 500's nine-per-cent gain this year, but has pulled back recently as some investors question whether the group is too expensive.

The tech-heavy Nasdaq bounced off its 50-day moving average.

With second-quarter U.S. corporate earnings reporting set to begin in earnest in July, investors are looking for results to support equity valuations. The S&P 500 is trading at nearly 18 times forward earnings estimates, above its long-term average of 15 times.

In earnings news, General Mills (GIS.N) shares rose 1.6 per cent after the Cheerios cereal maker reported a better-than-expected quarterly profit.

Staples (SPLS.O) shares rose 8.4 per cent. The company will announce its sale to private equity firm Sycamore Partners, a person familiar with the matter said on condition of anonymity.

Advancing issues outnumbered declining ones on the NYSE by a 3.18-to-1 ratio; on Nasdaq, a 3.29-to-1 ratio favored advancers.

About 6.7 billion shares changed hands in U.S. exchanges, below the 7.2 billion daily average over the last 20 sessions.