"Wood, the CEO of ARK Invest, said sometime in the next year there will be a shift toward rising interest rates, even as the Fed is widely predicted this week to cut rates for the second time this year. When this happens, "there will be a shudder," Wood told CNBC, even though history shows higher interest rates aren't necessarily correlated with lower innovation, which fuels market gains."
""Even in 2017 when interest rates went up, we had phenomenal performance," said Wood. "I want to disabuse people of that notion. But nonetheless, the way algorithms work these days, we think that there will be a reality check." Wood said she is not deterred by the possibility of a stock market pullback, and ARK Invest is continuing to invest in innovation plays around robotics, AI, blockchain, and energy storage."
"Multi-omic sequencing in the health care space-a deep analytical approach using multiple layers of biological data to diagnose diseases-is "the most underestimated and underappreciated" area of innovation ARK is investing in, she said. Overall, Wood is still bullish on the economy. While some fear a "bubble" on the horizon thanks to the massive increase in tech stock valuations, in part led by the AI boom, Wood said AI is not causing a bubble."
"She bets that a coming productivity boom will help push the stock market up even further later this year. "We think that the economy, the U.S.-and the rest of the world, of course, will participate-is going to move into a productivity-driven boom, just in time for our midterm election," Wood said. Economic uncertainty There are some signs that corporations are using AI to get more out of fewer workers."
The U.S. economy may shift from decreasing to rising interest rates within the next year, potentially causing a market "shudder." Historical episodes show higher rates are not necessarily correlated with weaker innovation, and markets can perform well despite rate increases. Market algorithms and positioning may produce a reality check or short-term pullback. Investment focus remains on robotics, AI, blockchain, energy storage, and multi-omic sequencing in health care. AI adoption could drive productivity gains, supporting a productivity-led economic boom that helps push stock markets higher. Corporate AI deployment is already prompting workforce reductions in some firms.
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