Ark Invest dumps Meta shares as Big Tech stocks continue to struggle

Cathie Wood’s Ark Invest is pulling out of Meta. The firm sold 12,595 shares of the tech giant on March 17, followed by another 2,160 shares on Tuesday.

This is the first time in a year that Wood’s fund has dumped shares of Meta, after spending most of 2024 buying up stock. Data compiled by Bloomberg shows Ark had been holding over 460,000 shares of the company as of December 31.

This sale comes as Big Tech stocks face increasing pressure. Meta’s stock turned negative for the year on Tuesday, making it the last of the Magnificent Seven—which includes Apple, Microsoft, Nvidia, Amazon, Tesla, Alphabet, and Meta—to lose its 2025 gains. Investors are offloading shares amid fears over president Donald Trump’s tariffs and the rapid advancements in artificial intelligence by Chinese startup DeepSeek.

Big Tech stocks lose steam as investors move to safer assets

The Magnificent Seven stocks are in trouble. The Bloomberg Magnificent 7 Total Return Index is down 16% this year. Investors are backing away from Big Tech, shifting their money into U.S. government debt. So far, $22 billion has flowed into short-term Treasuries, with $21.7 billion added between January and March 14, making it the largest quarterly inflow in two years.

Bob Michele, head of global fixed income at JPMorgan Asset Management, said the shift makes sense given the market’s volatility. “There have been substantial flows, and it makes perfect sense to us because you’ve had a lot of volatility across those markets with embedded risk, like equities,” Michele said.

Long-term government bond funds are also seeing inflows, but at a much lower rate. So far this quarter, only $2.6 billion has been invested in long-term debt funds. Analysts point to Donald Trump’s economic policies and fears of inflation as the key reasons investors are moving their money.

Fed holds rates steady as markets brace for impact

Investors are now looking to the Federal Reserve for direction. The central bank is set to release its latest economic and interest rate projections on Wednesday, with traders expecting interest rates to stay between 4.25% and 4.5%. The CME Group FedWatch tool shows a 99% probability that the Fed will hold rates steady.

At 5:10 a.m. ET, the 10-year Treasury note yield was at 4.288%, while the 2-year Treasury yield stood at 4.048%. Treasury yields move opposite to prices, meaning the increased demand for government debt is pushing yields lower.

Fed Chairman Jerome Powell has repeatedly signaled that the central bank is in no hurry to cut rates. The bond market is betting that the Fed will lower rates two to three times this year, but Powell has not confirmed whether those cuts will happen. Investors are watching closely to see if the Fed maintains its December projection of two rate cuts in 2025.

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