ARK Invest CEO Cathie Wood believes small businesses are poised for a resurgence, despite facing prolonged struggles since the COVID-19 pandemic.

What Happened: In the March edition of “In The Know,” Wood emphasized historical patterns, pointing to deregulation, tax cuts, and revived entrepreneurial spirit as catalysts for recovery.

Comparing the current climate to the mid-1990s, Wood noted that after an early-decade surge in commodity prices hurt small businesses, the telecom revolution, productivity gains, and policy changes led to a strong rebound.

“We're pretty excited about what the next few years are going to hold for smaller businesses,” Wood said.

Meanwhile, Fundstrat Global Advisors' Tom Lee remains optimistic about a sharp market recovery. He highlighted in an interview on CNBC that investor sentiment, which collapsed during previous downturns like 2018, has already followed a similar trajectory.

Lee pointed to the $850 billion in cash parked in money market accounts and the possibility of further tax reforms in the second half of the year as reasons for optimism. He asserted that the odds of a V-shaped stock market recovery after Apr. 2 are “extremely high,” drawing parallels to past market rebounds.

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Why It Matters: Lee also identified Tesla Inc. TSLA as a key indicator of market recovery. The stock has been volatile, impacted by political scrutiny and concerns over CEO Elon Musk's influence. However, Tesla has already rebounded more than 15%, which Lee sees as a bullish signal for the broader market, including the Magnificent Seven tech stocks.

The backdrop for these predictions includes President Donald Trump's recently announced 25% auto tariffs, which rattled markets. Trump dismissed concerns about the market selloff, stating it would “take care of itself in one day, two days, or one week.”

However, Musk warned that the tariffs would have a “significant” cost impact, potentially affecting pricing and supply chains. With uncertainty surrounding regulatory policy, tariffs, and tax reform, Wood and Lee argue that shifting sentiment and renewed business investment could drive a strong economic and market rebound in the coming months.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.