All 36 ARKK holdings fall, making Cathie Wood’s deflation call seem far off
Andres Victorero/iStock via Getty Images

Cathie Wood, CEO of ARK Invest, has long argued that deflation represents a bigger longer-term threat than inflation. In the near term, though, fears about inflation and the Federal Reserve's aggressive plans to raise interest rates have all 36 holdings of ARK Innovation ETF (NYSEARCA:ARKK) trading lower on Monday.
The Nasdaq Composite (COMP.IND) is lower by 4.3% in early action, while the innovation-focused ARK Innovation ETF (ARKK) has fallen by 9%. Meanwhile, since Fridayâs CPI data was announced, ARKK has dipped 12.2% to Mondayâs level of $36.50.
ARKK has been dragged down by Coinbase Global (NASDAQ:COIN), which has fallen 12.5%, amid another selloff in the cryptocurrency space. COIN represents ARKKâs ninth-largest holding, with a portfolio weighting of 4.08%.
Moreover, Zoom Video Communications (NASDAQ:ZM), Wood's top holding in ARKK at 10.21%, has fallen by 5.5%.
ARKK has cratered 61.8% so far this year and has declined in seven straight months. The ETF is also in position to close lower for the eighth consecutive month.
Inflation has been the major story over ARKKâs seven-month decline. During that period, CPI Y/Y prints have been rising from 6.8% in November to May's reading of 8.6%. Meanwhile, this has led to expectations of a more aggressive Fed, with the central bank projected to hike interest rates to tamp down higher prices.
An environment of rising rates cuts into the valuations for more speculative investments, like the ones favored by Wood. At the same time, the possibility of an eventual recession pushes back expected profitability for many of the ARKK players.
In related ARKK news, Wood put an aggressive target on ZM to reach a stock price of $1,500 by 2026.