Cathie Wood’s ARK Innovation ETF was tumbling Tuesday morning as technology stocks slumped amid concerns that a stronger-than-expected inflation reading Tuesday will lead to more aggressive interest rate hikes by the Federal Reserve. Shares of ARK Innovation ARKK, -6.79% were down 6.3% Tuesday morning, while the Technology Select Sector SPDR Fund XLK, -5.31% fell 3.8%, FactSet data show, at last check. The U.S. stock market is broadly selling off after the U.S. Bureau of Labor Statistics reported Tuesday that the consumer price index showed U.S. inflation rose 0.1% in August for an annual rate of 8.3%. That was more than forecast, while the core CPI reading, which excludes gas and energy prices, also was stronger than expected. The Fed has been trying to tame high inflation by rate hikes, with investors bracing for another large increase at its policy meeting later this month. Tech and other growth stock valuations are particularly vulnerable to rising rates. Invesco QQQ Trust QQQ, -5.48%, which tracks the Nasdaq-100 index, was sinking around 4.2% Tuesday morning, suffering deeper losses than the 3% drop for the SPDR S&P 500 ETF Trust SPY, -4.35%, according to FactSet data, at last check.
