TORONTO -- Technology drove Canada's main stock index and U.S. markets higher on a levelling of bond yields in response to dovish comments from the U.S. Federal Reserve.

Minutes from a recent meeting released Wednesday and comments Thursday by Fed chairman Jerome Powell that “didn't rock the boat” helped to convince investors that the central bank is in no hurry to pull back on its monetary stimulus, says Erik Bregar, head of currency strategy at the Exchange Bank of Canada.

“A lot of people said that they kind of got a little too carried away with pricing-in earlier rate hikes but bonds have ... calmed down a little bit this week and that's given an environment for risk-on to continue,” he said in an interview.

U.S. 10-year bond yields slipped to 1.628 per cent after rising to as much as 1.746 at the close of March.

The move lower helped the technology sector which thrives in a low bond-yield environment.

It also pushed the S&P 500 and the S&P/TSX composite to new record highs.

The Toronto index gained 99.80 points for a record close of 19,228.87.

In New York, the Dow Jones industrial average was up 57.31 points at 33,503.57. The S&P 500 index was up 17.22 points to a record close of 4,097.17, while the Nasdaq composite was up 140.47 points at 13,829.31.

Canada's technology sector gained 2.7 per cent with BlackBerry Ltd. up 5.6 per cent, Lightspeed POS Inc. 5.3 per cent higher and Shopify Inc. gaining 5.1 per cent.

Bond yields also supported gold prices, which hit a six-week high.

The June gold contract was up US$16.60 at US$1,758.20 an ounce and the May copper contract was up four cents at US$4.09 a pound.

Shares of New Gold Inc. increased 9.4 per cent.

Energy closed slightly higher as oil prices dropped after the U.S. reported a dip in inventories. Crude stockpiles fell by 3.52 million barrels last week to 498.3 million barrels. That compared with an expected increase of 1.325 million barrels.

However, gasoline inventories rose by four million barrels, or 1.8 per cent, to 234.6 million barrels.

“I think oil's got a few different things to potentially worry about, hence its relative underperformance this week,” Bregar said, pointing to OPEC raising its output over the next three months and the impact of lockdowns on energy demand.

The May crude contract was down 17 cents at US$59.60 per barrel and the May natural gas contract was up two tenths of a cent at US$2.52 per mmBTU.

Enerplus Corp. gained 6.6 per cent.

A weaker U.S. dollar helped the Canadian dollar to appreciate, trading for 79.50 cents US compared with 79.26 cents US on Wednesday.

The health-care sector lost 1.5 per cent as Canopy Growth Corp.'s deal to purchase Supreme Cannabis Co. Inc. caused the Ontario firm's shares to fall 5.3 per cent while Supreme's surged nearly 50 per cent.

Industrials moved lower with shares of Air Canada down 2.4 per cent.

A rise in weekly first-time U.S. benefit claims didn't have a significant impact on markets after Friday's strong jobs numbers. Some 744,000 Americans filed for unemployment benefits last week, an increase of 16,000 from the previous week.

“I think you could very much argue there's a disconnect fundamentally there, but to be honest I can't really point to very many jobless claims numbers that have moved markets meaningfully over the last few months,” said Bregar.

Friday's Canadian jobs numbers for March could have an impact on the Canadian dollar if the data is weak, he said.

“But anything close to expectations or above expectations will probably just keep the market kind of where it is now, maybe a little bit higher.”

This report by The Canadian Press was first published April 8, 2021.