(Bloomberg) -- Cathie Wood’s flagship fund is on pace to have its best day on record as riskier assets bounce following a softer-than-expectation inflation report.
The ARK Innovation ETF (ticker ARKK) surged near 13% on Thursday after data showed that prices rose slower than forecast, which fueled bets that the Federal Reserve could dial back its aggressive tightening efforts. That’s good news for riskier assets that have been weighed down by the central banks rate-hiking efforts.
Meanwhile, the AXS 2X Innovation ETF (TARK), which tracks double the performance of Wood’s fund, raced ahead by 23%, the most since its inception earlier this year, while the AXS Short Innovation Daily ETF (SARK), which is structured to deliver the inverse of ARK Innovation’s performance each day, slid close to 13%, the most on record.
“It’s a super mean-reversion day,” said Todd Sohn, ETF strategist at Strategas Securities. “A little beat on inflation and we see market relief,” he said, adding that a lot of investors who had shorted ARKK might also be forced to cover their positions.
Stocks and cryptocurrencies surged on Thursday for its best day since April 2020, with the S&P 500 adding more than 4% at one point. Bitcoin, the largest digital token by market value, gained more than 12% to trade above $17,000, following a two-day drubbing that saw it tank below many closely-watched technical levels as the collapse of the popular crypto exchange FTX.com spurred industry wide angst. A basket of the most shorted companies gained more than 8%.
Wood’s other funds, including the ARK Fintech Innovation ETF (ARKF) and ARK Genomic Revolution ETF (ARKG) each added more than 8% Thursday.
“This is a very highly skewed buy-day. I think this is well-needed good news for the market after the last 48 hours. ARK’s fund was getting destroyed all week,” said Anthony Denier, CEO of trading platform Webull. “It’s kind of one of those ‘hoorah’ moments for the market that there’s finally some good news, or at least finally some light at the end of the tunnel, that we’re kind of making way through this inflation cycle.”
Still, the year hasn’t been the kindest of years for Wood and her suite of products. ARKK’s top holdings -- tech companies that project growth far out into the future -- have suffered amid the Fed’s monetary tightening campaign. ARKK is down more than 60% this year as is ARKF, while the ARKG has shed about 46%.