After six consecutive weeks of gains, the TSX Composite Index recently posted a fresh all-time high, showing remarkable strength despite lingering economic uncertainty. This recent rally in Canadian equities is mainly supported by easing inflation concerns, steady interest rate policies, and renewed optimism in key market sectors like technology, consumer cyclicals, and financials. But after such a strong run, the big question on investors’ minds is whether this momentum can continue or if the market is due for a breather.
In this article, let’s explore the key drivers behind the TSX’s record-breaking rally and whether there’s enough fuel left in the tank for more upside.
What drove the TSX to record highs?
One big reason for the TSX’s strong performance lately is the return of investor confidence in some of Canada’s most influential sectors. We’re seeing tech stocks bounce back after a tough start to 2025, with names like Celestica and Shopify leading the charge. The financial sector is also helping lift the index as banks benefit from stable loan volumes and solid credit conditions. Meanwhile, energy stocks are riding high again.
Another key driver has been corporate earnings. Many TSX-listed companies have delivered strong quarterly results in recent weeks, surprising investors in a good way. This has sparked fresh buying interest across the board. Pair that with the fact that inflation is easing, and the case for continued investor optimism gets even stronger.
Could this TSX rally keep going?
There’s a good chance this rally isn’t done yet. Central banks in both Canada and the United States are expected to cut interest rates further in the coming months as inflation continues to cool.
Plus, trade tensions that weighed heavily on investor sentiment in recent months are now easing. Companies have started to adjust their operations and supply chains to be more resilient. With geopolitical risks cooling a bit and consumer demand showing signs of holding up, the economic environment for Canadian equities looks better than it has in a while.
If this trend continues, we could see more investors shifting back into equities from cash and bonds — which could give the TSX another leg up.
Where to invest your money right now
If you’re wondering where to put your money in this kind of environment, the tech sector might be worth a close look, especially companies using artificial intelligence (AI) to solve real-world problems.
Kinaxis (TSX:KXS) is one stock I believe deserves a spot on your radar and maybe even in your portfolio. Based in Ottawa, Kinaxis is all about supply chain orchestration. Its platform, Maestro, uses artificial intelligence (AI) to help companies better plan, adapt, and respond to disruptions.
Right now, Kinaxis stock trades at $197.98 per share, with a market cap of around $5.6 billion.
In the March 2025 quarter, the company’s sales grew 11% year over year, while adjusted earnings before interest, taxes, depreciation, and amortization margin jumped to 25%, a strong sign of improving profitability. Kinaxis also just launched new AI tools to tackle tariff uncertainty and help users simulate real-time responses. That move isn’t not just smart, it looks future-ready. For investors looking to ride the next wave of the TSX rally, this could be a stock worth owning and holding onto.
