The sharp fall in US stocks triggered by higher-than-expected August inflation data released on Tuesday, September 13th, seems to give Ark Investment Management and hedge funds of "wooden Sister" Cathie Wood a chance to bottom out.

Ark Investment Management's eight exchange traded funds (ETF) bought 27 stocks on Tuesday, with the largest number of stocks buying$Roku Inc (ROKU.US)$To become the "wooden Sister" flagship fund of 8 billion US dollars.$ARK Innovation ETF (ARKK.US)$It sold about 1.5 million Signify Health shares on the day. On the same day, wooden Sister spent $41.9 million to increase its positions in these companies, and the number of companies bought was the highest in a single day since February.

On Tuesday, the technology-dominated Nasdaq 100 index posted its biggest one-day fall since the COVID-19 outbreak in March 2020 as markets bet that the Fed could raise interest rates sharply this month.

Still, Cathie Wood, founder of Ark, said on Monday that deflation was "brewing"-her "bottoming out" on Tuesday showed that the company was preparing for it.

Athanasios Psarofagis, a researcher at Bloomberg ETF, said:

Her purchases in the U. S. stock market have fallen a lot since January, but have begun to rise in recent days. It seems that her faith is higher now. Judging from her behavior on Tuesday, Sister Wood is very confident.

ETF, owned by Ark, has been under intense pressure from the Fed's aggressive tightening policies this year, with a series of sharp interest rate hikes hitting market speculation and dragging ARKK down more than 55 per cent so far this year. During the decline, Wood stuck to her strategy of doubling bets on the losers and selling the winners.

Roku is down nearly 71 per cent this year, while Butterfly Network and Zoom, the second and third largest stocks bought by the fund on Tuesday, are down about 14 per cent and 58 per cent, respectively. Meanwhile, Wood sold about 1.5 million shares of Signify Health, which have soared about 160 per cent since mid-June.

In addition, hedge funds, which have always been easy to make a mountain out of a molehill during Tuesday's plunge in US stocks, were relatively calm.

Goldman Sachs Group's Prime Services department, which serves hedge funds, said they saw few signs of long-term liquidation or risk unwinding.

Tuesday was the second consecutive day of net sales of US hedge funds, with short selling and selling mainly concentrated in macro instruments, according to Goldman Sachs Group.

On Tuesday, driven by risk flows, net purchases of hedge fund stocks were moderate, with information technology, health care, real estate and essential consumer goods being the sectors with the largest net purchases (all driven by bulls). Energy, materials and non-essential consumer goods are the sectors with the largest net sales (all driven by short selling).

Among them, information technology stocks have been bought net in 12 of the past 14 trading days, and the industry weighting is now-4.1% compared with the s & p 500, above the all-time low set on august 23.It also reflects that hedge fund managers have also begun to bottom out technology stocks in the past three weeks or so.