The 18-year-old Shapovalov, who needed a wild card to get into the tournament, continued his giant killing form at the hardcourt tournament by rallying to beat Nadal in three sets, 3-6 6-4 7-6 (7/4) yesterday.
Nadal would have returned to No. 1 in the world if he had defeated Shapovalov yesterday, and then Chung Hyeon or Adrian Mannarino today.
Shapovalov's stunning upset against the reigning French Open champion came as a result of some inspired tennis in front of a boisterous home crowd who cheered his every shot.
Shapovalov won seven of the final eight points of the third set tiebreaker before closing out the match with a forehand winner down the line. He celebrated by falling onto his back then covering his face with his hands.
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Shapovalov blasted a total of nine aces, including ones on his second serve that handcuffed Nadal. He also had seven double faults and won 67 percent of his first serve points.
Elsewhere yesterday, Roger Federer maintained his career-long winning streak over David Ferrer to advance to the quarter-finals after a three-set battle with the veteran Spaniard.
Federer, 36, had never lost in 16 previous meetings with the 35-year-old Ferrer, whom he first defeated 14 years ago at the Vienna Indoor tournament.
But while Ferrer managed to take the opening set -- ending Federer's 32-set streak -- the Swiss ace raised his game to win 4-6 6-4 6-2.
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A strangely error-prone Federer was unable to generate his usual fluency early on, and quickly found himself giving away early breaks to trail 4-1 in the first set.
Nowhere was Federer's wayward performance better illustrated than in the seventh game, when he squandered three break points at 0-40 to allow Ferrer to take a 5-2 lead.
But Federer was struggling again as he served to level the set, finding himself a set point down. He saved the first with an ace but Ferrer made no mistake with his second set point, converting to take the opener 6-4.
Federer responded quickly in the second set, going a break up to lead 3-2 before holding for a 4-2 lead.
With Federer slowly improving his first serve, Ferrer was unable to carve out the break opportunities he had found in the first set.
An early break in the decider put him in control as a weary Ferrer began to tire.
Some vintage play at the net helped put Federer 4-2 up with Ferrer seemingly unable to summon a response.
The decisive break came in the seventh game, with Ferrer netting a forehand return to leave Federer 5-2 up and serving for the match.
Federer promptly went in for the kill, attacking the net and opening up the court to clinch victory with a deft volley.
Federer will now play another Spaniard, Roberto Bautista Agut, in the quarter-finals. Bautista Agut defeated France's Gael Monfils in a gruelling slugfest, winning 4-6 7-6 (7/5) 7 -6 (7/2).
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