Major US stock indexes gained on Wednesday, boosted by financial shares amid encouraging economic data and by the energy sector as oil prices surged to June highs.

US Treasury yields also rose after data showed US services sector activity rebounded to an 11-month high in September, an encouraging sign for economic growth.

The Dow Jones industrial average rose 112.58 points, or 0.62 per cent, to 18,281.03. The S&P 500 gained 9.24 points, or 0.43 per cent, to 2,159.73 and the Nasdaq Composite added 26.36 points, or 0.5 per cent, to 5,316.02.

“We’re taking a little victory lap today after the surprisingly good economic data,” said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.

US stocks had been pressured this week by concerns over Britain’s exit from the European Union and expectations of a Federal Reserve interest rate increase in the coming months.

Fed rate hike

Chicago Fed President Charles Evans said he would be “fine’’ with raising US interest rates by year-end if US economic data remained firm.

Traders see a 60-per cent chance the Fed will hike at its December meeting, according to the CME FedWatch website.

Financial shares, which tend to benefit in a rising rate environment, climbed 1.5 per cent, while the energy sector gained 1.4 per cent.

“People are certainly waiting for that inevitable interest rate rise by the Fed, but I think they’re just not sure if thas a sign that things are better and earnings are likely to improve, or a reason for people to sell stocks because rates are rising,” said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey.

In Europe, bond yields jumped while the pan-European STOXX index fell 0.6 per’cent. Markets were rattled by the prospect of the region’s central bank eventually winding down its bond-buying stimulus.

ECB taper of bond-buying

A Bloomberg article on Tuesday cited sources as saying the European Central Bank would probably wind down the monthly €80-billion ($90-billion) scheme gradually.

Italy’s 10-year bond yield rose to 1.38 per cent, its highest level since late June, according to Reuters data. Germany’s 10-year Bund yield, the euro zone benchmark, rose more than 8 bps to hit zero for the first time in a fortnight .

“I am surprised at the reaction, but it’s just this notion that the ECB may be discussing tapering one day that has upset the market,” said ING rates strategist Benjamin Schroeder.

MSCI’s gauge of stocks across the globe climbed 0.2 percent after two sessions of declines.

US crude inventories

Oil prices rose to their highest since June after the fifth unexpected weekly drawdown in US crude inventories added to support on hopes that major producers will agree to cut output next month.

The US Energy Information Administration said crude stockpiles fell 3 million barrels last week, opposite of forecasts of analysts polled by Reuters for a build of 2.6 million barrels.

Benchmark Brent crude settled up 2 per cent to $51.86 a barrel, while US West Texas Intermediate crude settled up 2.3 per cent at $49.83 a barrel.

Benchmark US 10-year notes fell 11/32 in price to yield 1.72 per cent, up from 1.68 per cent late Tuesday.

The dollar was little changed against a basket of currencies as the encouraging services sector data offset a weaker-than-expected report on private-sector job growth.

Sterling rose 0.2 per cent against the dollar, after dipping below $1.27 and hitting a three-decade low against the greenback during the session amid worries about Britain’s EU exit.