New York, February 1, 2026, 13:05 EST — The market has closed.
- Shares tied to data centers dropped on Friday, with Vertiv and Arista Networks taking the biggest hits
- Investors are gearing up for a packed week of U.S. economic data alongside megacap tech earnings that might reshape expectations around AI-related investments
- Data center REITs continue to face pressure from rate sensitivity
Data center shares dipped Friday, with Equinix slipping 0.6% to $820.93 and Digital Realty Trust retreating 0.9% to $165.95. Vertiv took a bigger hit, dropping 4.5% to $186.18, and Arista Networks slid 4.3% to $141.74. The Global X Data Center & Digital Infrastructure ETF declined 2.5%, while the Pacer Data & Infrastructure Real Estate ETF fell 2.0%.
The pullback comes just before a packed earnings week that could steer the next phase for the trade. Investors are eyeing results from Advanced Micro Devices, Alphabet, and Amazon.com as key indicators on AI demand, cloud expansion, and future spending.
Macro data might prove equally important. This week’s series of U.S. labor-market reports peaks with Friday’s January nonfarm payrolls figure, as traders gauge its impact on interest rates and bond yields — crucial factors influencing REIT valuations.
Friday’s risk-off sentiment hit the group hard. U.S. stocks dropped after Donald Trump picked Kevin Warsh to lead the Federal Reserve. Producer prices climbed beyond forecasts, sparking doubts about the returns on heavy corporate capital expenditures. Terry Sandven from U.S. Bank Asset Management noted, “Today’s volatility… is more a function of inflationary indicators… and… the profitability of the massive capex levels that are being spent.” Reuters
This blend strikes the data center sector on two fronts. Rising yields pressure REITs — real estate investment trusts — since their dividends compete with safer returns and borrowing costs become crucial. For gear manufacturers, the key issue is whether major clients maintain their current order volumes.
Tensions on Friday weren’t just about data centers; tech earnings and broader policy uncertainty played a role too. Angelo Kourkafas at Edward Jones pointed to “a combination of investor concerns around the Fed chair announcement, some mixed tech earnings and lingering inflation pressure.” Reuters
Investors continue to view the sector as a key driver for AI expansion, yet patience on timing is wearing thin. Watch for “capex” mentions in conference calls, plus updates on how fast data centers are added, power and cooling challenges, and the speed of leasing new capacity.
Traders will probably see Monday’s open as a reset following Friday’s sharp move. A steady bond market alongside strong spending data might steady the REITs. Meanwhile, suppliers like Vertiv and Arista often behave more like high-beta tech stocks when risk appetite shifts.
The downside risk is obvious. Should yields climb further, or if earnings season brings more warnings about cloud growth or AI infrastructure profits, the sector might remain under pressure—even without new company-specific developments.
The next major event is Friday, February 6, when the U.S. jobs report drops alongside its annual revisions. Earlier in the week, data like ISM surveys and various labor indicators will move rate expectations.
