NEW YORK, Jan 17, 2026, 13:45 EST — Market closed
- Cloud software ETFs trailed the megacaps Friday amid a rise in Treasury yields.
- Amazon’s AWS has launched a Europe-based “sovereign cloud” service designed to meet strict data-control requirements.
- Investors come back Tuesday, with eyes on Microsoft’s Jan. 28 earnings for fresh insight into cloud demand.
Cloud computing stocks enter the extended U.S. weekend under fresh scrutiny after Amazon’s AWS rolled out a cloud service based solely in Europe. The move targets clients worried about data access and legal jurisdiction. (Reuters)
The term “sovereign cloud” — which refers to keeping data and control within a given jurisdiction — is shifting from a niche preference to a must-have for certain regulated buyers. Investors are also pressing tougher questions about whether massive AI investments will deliver returns quickly enough.
Markets shut Monday for Martin Luther King Jr. Day, shifting the next U.S. trading session to Tuesday and squeezing this week’s stream of earnings reports and rate updates. (Investopedia)
Wall Street ended Friday nearly unchanged, with Treasury yields edging higher after President Donald Trump hinted he might retain adviser Kevin Hassett, casting uncertainty over who will lead the Federal Reserve next. The 10-year yield hovered near 4.227%. Anthony Saglimbene of Ameriprise described the market as “flat-lining” amid a wait for fresh earnings reports. (Reuters)
Microsoft (MSFT) edged up 0.7% to $459.86, and Amazon (AMZN) ticked higher by 0.4%, closing at $239.12. Oracle (ORCL) also rose 0.7%, finishing at $191.09, while Snowflake (SNOW) saw a 1.3% gain to $210.38. On the flip side, Salesforce (CRM) dropped 2.8% to $227.11, and ServiceNow (NOW) lost 2.9%, ending at $127.31. Alphabet (GOOGL) slipped 0.9% to $330.00. Cloud ETFs took a hit, with WisdomTree Cloud Computing Fund (WCLD) down 2.0% and First Trust Cloud Computing ETF (SKYY) off 0.9%.
AWS says its European Sovereign Cloud is both physically and logically isolated from other AWS regions. The company plans to pour over 7.8 billion euros into Germany as it grows its footprint across the EU. “Europe needs access to the most robust cloud and AI technology,” managing director Stephane Israel said in a statement. (Business Wire)
Friday’s split tape reflects a bigger shift in U.S. stocks. Some investors are looking past the AI-fueled megacaps that have dominated lately. “I still think tech works. You don’t want to be chasing it, but you also don’t want to be underweight,” said Jack Janasiewicz, portfolio manager at Natixis Investment Managers. (Reuters)
Software-heavy cloud stocks have swung the other way. William Blair analyst Arjun Bhatia referred to the sector’s recent stumble, linked to new AI tools, as “the latest Boogeyman in software.” (Barron’s)
Costs tied to all this computing power are back under scrutiny. Barclays projects U.S. corporate bond issuance will climb to $2.46 trillion in 2026, flagging “the biggest upside risk is AI hyperscaler capex” — referring to the few massive cloud operators running vast data-center networks. (Reuters)
Sovereign cloud setups don’t come cheap and take time to roll out. Europe’s drive for stricter oversight risks duplication and ramps up compliance expenses. If yields climb and rate cuts get pushed back, high-multiple cloud software stocks might remain under pressure, even as major platforms gain business.
Microsoft’s quarterly earnings drop Wednesday, Jan. 28, after the U.S. market close. Investors will be parsing the report for shifts in cloud demand and any tweaks to capital spending that might shake up forecasts for cloud computing stocks. (Microsoft)
