Canada’s main stock index hit a one-week high on Tuesday, lifted by technology and mining stocks, as softer-than-expected U.S. inflation raised hopes the Federal Reserve could shift to smaller rate hikes.

At 10:00 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 279.6 points, or 1.4%, at 20,299.3.

The much-awaited inflation data showed U.S consumer prices barely rose in November, leading to the smallest annual increase in inflation in nearly a year.

Softer inflation data can give the Federal Reserve cover to start scaling back the size of its interest rate increases as soon as Wednesday, its last meeting of the year.

“Today’s very unexpected downside surprise has suddenly precipitated a massive risk-on reaction,” said Brandon Michael, senior analyst at ABC Funds.

“Investors had been extraordinarily negative in regard to inflation and pending central bank monetary policy tightening.”

Rate-sensitive technology stocks led gains, jumping 3.9%, with Shopify as top gainer, up 8.6%. The tech index recorded its biggest single-day jump in over a month.

The materials sector, which includes precious and base metal miners, added to the cheerful mood, climbing 3.1%, as gold prices jumped against a weaker greenback.

The energy sector climbed 2.9% on higher crude prices.

Canadian stocks have recovered sharply from their October lows on hopes the U.S. Fed and other major central banks may temper their aggressive rate-hike stances on signs inflation may have peaked.

Among single stocks, Bank of Montreal slipped 0.2% after announcing an offering of common shares.