Table of Contents

Market Context
What Happened
Why It Matters
Sector Breakdown
Risks to Watch
What to Watch Next
Final Outlook

Market Context

Canadian growth and technology stocks continued their strong run Tuesday, extending momentum from Monday’s record-setting rally even as broader market caution ahead of today’s Federal Reserve decision weighed on most other sectors. The sector’s resilience through a genuinely mixed session underscores how much investor confidence has built in Canada’s technology names over the past several weeks.

What Happened

Celestica gained 1% Tuesday after beating second-quarter adjusted earnings estimates, extending its strong performance following Monday’s results showing revenue up 62% year-over-year to $4.70 billion. Shopify added 2%, building on Monday’s dramatic 11.64% surge that followed RBC’s commentary on the company’s defensibility against AI-driven disruption. Constellation Software rose 2.5%, continuing its own strong week. The gains came even as the broader TSX Composite edged lower Tuesday, with gold miners, financials, and energy stocks all retreating ahead of today’s Federal Reserve decision, due at 2:00 p.m. Eastern. TFI International also posted a strong 7% gain Tuesday after beating forecasts, adding to the day’s list of growth-oriented outperformers.

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Why It Matters

Technology’s ability to extend gains even during a broadly cautious, pre-Fed session suggests genuine underlying conviction rather than pure momentum. With gold, financials, and energy all pulling back Tuesday on positioning ahead of today’s decision, the fact that Celestica, Shopify, and Constellation Software continued advancing points to a sector benefiting from company-specific catalysts strong enough to overcome broader macro caution.

Celestica’s continued strength following Monday’s earnings beat reinforces the durability of the AI infrastructure growth story specifically. A second consecutive day of gains after such a strong quarterly report suggests the market is still working through the full implications of the company’s 62% revenue growth, rather than having already fully priced in the news on the initial reaction day.

Sector Breakdown

Within AI-linked hardware, Celestica’s continued gains reflect ongoing investor confidence in the company’s data centre and cloud infrastructure business following its strong second-quarter results. Within e-commerce and software, Shopify’s continued advance, building on Monday’s dramatic re-rating, suggests the market continues digesting RBC’s commentary on the company’s resilience to AI-driven competitive pressure. Constellation Software’s steady gains reflect broader renewed confidence in Canadian enterprise software following a period of pressure tied to AI disruption concerns earlier in the summer.

Risks to Watch

The most immediate risk for growth and technology names is that today’s Fed decision, even if it results in the widely expected hold, includes commentary from Chair Warsh that shifts rate expectations meaningfully higher, which would pressure growth stock valuations broadly given their sensitivity to interest rate assumptions. Both Shopify and Celestica have now posted substantial gains over a short period, raising the bar for continued strong execution to justify their re-rated valuations. Broader market caution, evident in Tuesday’s pullback across other sectors, could eventually spill over into technology names if today’s Fed announcement proves more hawkish than currently anticipated.

What to Watch Next

Investors should watch today’s Fed decision and Chair Warsh’s press conference closely for its impact on growth stock valuations broadly. Continued trading in Celestica, Shopify, and Constellation Software will offer a read on whether this week’s momentum can extend through a potentially more hawkish macro backdrop. TFI International’s earnings beat may also prompt renewed investor attention to other Canadian growth and logistics names in the coming days.

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Final Outlook

Canadian growth and technology stocks have shown genuine resilience this week, extending gains even as broader market sentiment turned more cautious ahead of today’s Fed decision. The sector’s ability to maintain momentum through today’s announcement will be an important test of whether this week’s re-rating reflects durable conviction or simply favourable positioning.

Verdict: Watchlist candidates, not a broad buy signal, given how much both Shopify and Celestica have already moved this week.