Photo: The Canadian Press

TORONTO — Canada’s main stock index moved lower Wednesday as the market digested an interest rate hike by the Bank of Canada, while U.S. markets were mixed.

The Bank of Canada hiked its key interest rate by a quarter of a percentage point to 4.75%, the first increase since January.

The raise was a response to inflation ticking unexpectedly higher in April after months of steady decline, said Kevin Burkett, portfolio manager at Victoria-based Burkett Asset Management. Inflation in April was 4.4% year over year, up from 4.3% in March.

“It was breaking what was a very steep downtrend in inflation data,” Burkett said.

While the market was initially caught by surprise at the Bank of Canada’s decision, it appears to have digested it and normalized as the day wore on, Burkett said.

The S&P/TSX composite index was down 71.91 points at 19,983.69.

In New York, the Dow Jones industrial average was up 91.74 points at 33,665.02. The S&P 500 index was down 16.33 points at 4,267.52, while the Nasdaq composite was down 171.52 points at 13,104.89.

The rate hike wasn’t an out-of-the-blue decision, as the Bank of Canada had always left the door open to more rate hikes if the economic data supported that decision.

“I think that willingness to raise here, as a reaction to evidence that things may be heating up again, was appropriate and wasn’t entirely unexpected,” he said.

The central bank could hike again if needed, Burkett said.

Meanwhile, investors in the U.S. are waiting for their own central bank to announce its next rate decision next week. Many expect a pause from the Federal Reserve, Burkett said, but the bank will likely remain hawkish.

The Canadian dollar traded for 74.76 cents US compared with 74.52 cents US on Tuesday.