Cloud computing stocks staged a notable rebound on Friday, February 15, 2026, as investor sentiment improved following the release of encouraging inflation data. Major cloud-focused exchange-traded funds (ETFs) each climbed approximately 2.6% in the session, providing a bright spot in a week where broader market indexes ultimately closed lower.
Market Movers and Key Data
The First Trust Cloud Computing ETF (SKYY) settled at $114.26, while the WisdomTree Cloud Computing Fund (WCLD) closed at $28.19. The Global X Cloud Computing ETF (CLOU) finished the day at $19.62. The rally was fueled by a U.S. Consumer Price Index report showing annual inflation rose 2.4% in January, slightly below the 2.5% consensus forecast from economists.
Concurrently, benchmark Treasury yields retreated. The yield on the 10-year U.S. Treasury note fell 5.6 basis points to finish near 4.05%. This decline in yields is particularly significant for high-growth sectors like cloud software, as lower rates increase the present value of future cash flows, a core component of valuation models for these companies.
Sector Context and Lingering Caution
Cloud and software-as-a-service (SaaS) stocks have increasingly become a barometer for market expectations regarding interest rates and the long-term impact of artificial intelligence. While the sector enjoyed gains, broader market performance was mixed. The Nasdaq Composite edged down 0.22% on Friday. For the week, all three major U.S. stock indexes posted losses despite the positive inflation surprise.
The S&P 500 Software & Services index managed a 0.9% gain, but the broader S&P 500 Technology sector ended the session down 0.5%. This divergence underscores a cautious tone on Wall Street. "Large cap tech stocks continue to be an anchor on the market and any whiff of optimism continues to get rejected," noted Michael James, managing director at Rosenblatt Securities.
ETF Composition and Holdings
The First Trust Cloud Computing ETF (SKYY) tracks the ISE CTA Cloud Computing Index, which includes companies involved in cloud infrastructure, platform, and software services. As of Friday's close, CoreWeave and Arista Networks (ANET) were the fund's top holdings, followed by Alphabet (GOOGL), MongoDB (MDB), and Nutanix (NTNX). First Trust data indicates the ETF maintains a diversified portfolio, with no single stock constituting more than 4.5% of its assets.
Tim Holland, chief investment officer at Orion, commented on the day's developments: "Either way, it is a bit of good news as we head into the long holiday weekend." U.S. equity markets were closed on Monday, February 18, in observance of Presidents Day, with regular trading set to resume on Tuesday.
Forward-Looking Risks and Catalysts
Friday's rally leaves critical questions unresolved for the cloud sector. Investors are weighing the resilience of enterprise technology budgets should economic growth slow. Furthermore, there is ongoing debate about whether advanced AI capabilities will become standard features bundled into existing services rather than premium, fee-generating products.
The immediate path for cloud shares remains tightly linked to interest rate movements. Should Treasury yields reverse and climb again, the sector could relinquish its recent gains just as swiftly. The coming days offer several key events that may provide direction. The Federal Reserve will release the minutes from its January policy meeting on Wednesday, followed by the Personal Consumption Expenditures (PCE) price index for December on Friday. The PCE index is the central bank's preferred inflation gauge.
Earnings and the Week Ahead
Corporate earnings will also influence sentiment toward enterprise spending. Palo Alto Networks (PANW) is scheduled to report quarterly results on Tuesday, with several other major technology companies lined up to report later in the earnings season. These reports will be scrutinized for clues about the health of corporate IT investment.
As markets reopen on Tuesday, traders will be watching to determine if Friday's advance represents a sustainable turning point or merely a temporary respite in a challenging environment for growth-oriented technology stocks.
