Last week offered a pretty good reminder that “the market” isn’t one thing. While American technology stocks were getting hammered over renewed concerns about artificial intelligence, Canada’s TSX managed to finish the week higher. Strong oil prices helped offset a painful week for Canadian technology names, leaving investors with two very different stories depending on what they owned.
This week, I’m paying attention to what that split tells us, not trying to predict Monday’s opening bell. Between new Canadian inflation figures, earnings from major American technology companies and Alberta’s provincial referendum, there is plenty to watch between October 19 and October 23.
Ready to start investing? Click the Qtrade banner below to learn more and open a Qtrade Direct Investing account.
The TSX Held Up, but Not Every Sector Participated
The S&P/TSX Composite finished Friday at 36,176.55, up 1.44% for the week. That sounds like a positive result, and for the broader index it was. But on Friday alone, Canadian technology stocks dropped 3.5% while energy shares gained 2.8%, according to Reuters.
That difference matters because the TSX is not built like the Nasdaq. Canada has much more weight in energy, materials and financials, while the American market is more exposed to large technology companies. When investors suddenly pull money away from growth stocks, our market can look comparatively resilient even while some familiar Canadian names struggle.
The AI Sell-Off Hit Canadian Companies Too
The biggest story for me was the sharp reversal in AI-related stocks. Investors spent much of the week questioning whether the enormous amounts being borrowed and spent on data centres will produce enough profit to justify their valuations. U.S. AI infrastructure company CoreWeave lost roughly a quarter of its market value over five trading days, becoming a clear example of those financing fears.
The pressure quickly showed up in Canada. On Wednesday, Celestica (TSX: CLS), which supplies hardware and networking equipment used in data-centre infrastructure, fell roughly 9%. On Friday, Shopify (TSX: SHOP) dropped about 5% and BlackBerry (TSX: BB) fell 7.7%, helping drag the TSX technology sector lower.
What caught my attention was a change in confidence, not proof that AI demand has disappeared. My look at Canadian companies benefiting from AI power demand covers another part of the industry. Infrastructure demand can be real without every related stock being attractively priced.
Oil Helped Canada, but Higher Prices Come With a Cost
While technology struggled, oil offered an important counterweight. Brent crude briefly touched US$110 a barrel on Friday as Middle East supply concerns continued to weigh on energy markets. Canadian energy shares rose 2.8% that day, helping the TSX finish higher despite the technology sell-off.
For producers such as Canadian Natural Resources and Suncor, higher crude prices can support revenue and cash flow. The challenge is that the same energy costs can hurt households and businesses through higher fuel and transportation bills. So although higher oil can support Canadian energy stocks, it isn’t automatically good news for the wider Canadian economy.
Bank of Canada Governor Tiff Macklem added to that tension last week, warning that persistent energy costs could make inflation harder to control. Canadian home sales also weakened in September, reflecting pressure from mortgage costs and uncertainty around rates. My view is that investors should watch company balance sheets and cash generation rather than assuming every energy rally will last; I’ve covered those trade-offs in my look at Canadian oil and gas stocks.
Alberta’s Referendum Adds Another Canadian Story
Tomorrow, Monday, October 19, Albertans head to the polls for a provincial referendum covering ten questions. The most closely watched is Question 10, which asks voters to choose between Alberta remaining a province of Canada and beginning the legal process for a future binding referendum on separation. It is important to be clear: the separation question is non-binding, and Monday’s vote does not itself make Alberta independent.
This is obviously a major political issue, but there is an economic side worth following as well. Alberta plays an enormous role in Canadian energy production, investment and interprovincial trade, so uncertainty about its future could influence business confidence. That does not mean Monday’s vote will automatically move oil stocks or the Canadian dollar.
My Take: This Is a Week to Look Beneath the Headlines
I think last week’s trading exposed two risks that investors can easily overlook: paying too much for an exciting growth story and becoming too concentrated in one sector. The AI trade has genuine businesses and genuine demand behind it, but that doesn’t protect every company from falling valuations. On the other side, Canada’s energy-heavy market benefited from rising oil even as those same prices created inflation risks.
For my own long-term investing, I’d rather understand what I own than make a rushed move based on a dramatic headline. That means asking how much debt a business carries, how dependable its cash flow is and whether its valuation assumes everything goes perfectly. It also means checking whether several holdings depend on the same theme, something my Canadian ETF portfolio examples can help illustrate.
What I’m Watching This Week: October 19–23
Monday, October 19: Statistics Canada releases September inflation data, and the Bank of Canada publishes its business and consumer expectations surveys. Alberta also votes in its provincial referendum, with unofficial results beginning after polls close. Inflation and business sentiment may shape how investors think about Canadian rates, while the referendum adds a separate political development.
Tuesday, October 20: U.S. housing starts and building permits provide another look at an interest-rate-sensitive part of the economy. I’ll be watching whether construction activity suggests borrowing costs are slowing demand. It matters to Canadian investors because interest-rate expectations don’t stop at the border.
Wednesday, October 21: Earnings from Meta, Tesla and IBM put corporate guidance under the spotlight. For me, the important question is whether spending plans and results support the confidence investors previously placed in AI-related businesses. A good headline number won’t necessarily answer concerns about costs, borrowing or profitability.
Thursday, October 22: Canada’s industrial product and raw materials price indexes will offer a closer look at price pressures before they reach consumers. With energy prices elevated, I’ll pay attention to whether the pressure appears concentrated or more widespread. It’s another useful piece of the inflation picture.
Friday, October 23: Canada’s August retail sales figures and U.S. October business activity surveys round out the week. They should offer a read on consumer spending and whether American companies still see growth. I’ll be comparing those signals with the more cautious mood in technology shares.
Heading Into Monday
Last week showed how quickly market leadership can change. AI-related selling hurt Canadian technology, while oil supported the TSX. With fresh inflation data and Alberta’s referendum ahead, I’ll focus on what the numbers actually tell us rather than trying to guess next Friday’s headlines.
What do you think? Has the AI sell-off changed how you’re looking at Canadian stocks this week?
This article is for general information and opinion only, not personal financial advice. Markets and individual stocks can lose value.
Ready to start investing? Click the Qtrade banner below to learn more and open a Qtrade Direct Investing account.
