The resource-heavy S&P/TSX composite index was well off session lows, erasing a 137-point deficit to gain 90.02 points to 14,666.47.
The Canadian dollar gained 0.54 of a cent to 90.06 cents US.
U.S. markets ran up sharply and the greenback weakened as the minutes from the latest Federal Reserve meeting showed that central bank officials agreed that they would begin raising interest rates only when measures of the economy's health and inflation signalled the time was right.
The minutes of last month's meeting also showed that they have moved away from linking any rate change to any specific period.
The Dow Jones industrials jumped 274.83 points to 16,994.22, while the S&P 500 index rose 33.79 points to 1,968.89. Both were the biggest one-day gains for the indexes this year. The Nasdaq was ahead 83.39 points to 4,468.59.
Many analysts have expected the Fed to hike rates mid-2015, but a steady stream of positive U.S. data had persuaded some that it could push rates up even earlier. Adding to uncertainty about Fed intentions has been economic weakness in many areas outside of the U.S.
"We see little here to challenge our expectation that with the U.S. economy likely to continue to grow at an above-potential pace, the Fed will be in position to start the process toward policy normalization in the middle of next year with the first hike in the Fed funds target likely to be announced in June 2015," said Royal Bank assistant chief economist Dawn Desjardins.
On the TSX, gains were held back by the energy sector, losing almost one per cent as market sentiment continued to feel the weight of a double dose of weak economic signals from Tuesday. German industrial data raised concerns that Europe's biggest economy may not rebound as expected in the third quarter. Also, the International Monetary Fund trimmed global economic growth forecasts for 2014 and 2015.
Those concerns translated into questions about demand for crude, particularly after the U.S. Energy Information Agency said Wednesday that U.S. oil inventories rose by 5.1 million barrels last week. Analysts had expected supplies to rise by 2.1 million barrels and the November crude oil contract in New York fell $1.54 to a fresh 18-month low of US$87.31 a barrel.
"So you have a lot of supply and you have demand being curbed," said John Stephenson, president and CEO of Stephenson and Co. Capital Management.
"Global growth keeps getting revised down, its growth concerns weighing on markets, but particularly the commodity market because it is a growth market."
The gold sector was the strongest sector by far, up about seven per cent while the December gold contract faded $6.40 to US$1,206 an ounce.
The base metals component gained 1.4 per cent as December copper was unchanged at US$3.01.
The financials sector climbed one per cent.
Meanwhile, the start of third-quarter earnings data from U.S. corporations gets under way in earnest this week with results from Alcoa after the close. The resource giant posted a strong report as adjusted earnings came in at 31 cents a share against the 23 cents a share that analysts expected. Revenue of US$6.24 billion beat expectations of $5.85 billion and its shares gained 2.25 per cent in after-hours trading in New York.