Canadian stocks and bonds rallied on Wednesday, while the loonie weakened to a near two-week low against its U.S. counterpart, after the Bank of Canada became the first central bank among G7 countries to cut interest rates,

OTTAWA—The Bank of Canada cut its main interest rate by a quarter percentage point, becoming the first Group of Seven central bank to provide rate relief after global policymakers aggressively increased borrowing costs to tame inflation.

US stocks ticked higher on Wednesday as traders took in soft jobs data and revved up their hopes for Fed rate cuts later this year. All three benchmark indexes ticked higher, while long-dated bond yields slumped.

The Bank of Canada (BoC) is likely to cut its key overnight rate for the first time in more than four years on Wednesday, economists said, backed by a raft of data that points to cooling inflation and lackluster economic growth.