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Sizzling inflation that helped send 2-year U.S. Treasury yields to fresh 14-year highs continued to burn some of the winners of the so-called pandemic bubble Friday.

The ARK Innovation Fund, run by star stock picker Cathie Wood, dropped 4.3%, helped along by steep declines in top holdings including Intellia Therapeutics Inc and Block Inc, the company formerly known as Square.

The fund is now trading nearly 20% below the high it reached in late August, when investor hopes that the Federal Reserve would pause in raising interest rates helped the fund surge 40% from a two-year low reached in May. The fund is down nearly 55% for the year to date.

Higher yields punish more speculative, unprofitable companies that Wood tends to invest in by lowering the expected future value of returns while increasing the cost of capital.

Other speculative assets, including Bitcoin and meme stock AMC Entertainment Holdings Inc, fell Friday as well, with the movie theater operator losing around 5% and Bed Bath & Beyond Inc tumbling 5.2%.

“Market cycles have their own dynamics and we’re currently in a downdraft where the selling pressure is feeding on itself,” said Charles Lemonides, head of hedge fund Value Works LLC. “The valuation that some of these stocks reached during the pandemic was so outstretched that there has to be more pain ahead of them.”

Higher-than-expected inflation data released on Tuesday has pushed investors to price in more aggressive rate hikes by the Fed. Markets are now forecasting a 16% chance that the central bank will raise benchmark rates by 100 basis points at its meeting ending Sept. 21, up from a 0% chance one week ago..

Despite Friday’s declines, speculative assets are becoming more attractive given the likelihood that the Fed will overtighten financial conditions and be forced to cut rates early next year as the global economy slides into a recession, triggered in part by the Fed’s aggressive hikes, said Jamie Cox, managing partner at Harris Financial Group.

“Most of the speculative stocks have dropped more than what is reasonable given where we think rates will end. You can be a buyer of many of these stocks,” he said

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