Yahoo Finance Best Inverse/Leveraged ETF Areas of Last Week
Wall Street delivered a mixed performance last week, with the S&P 500 and the Nasdaq adding 0.3% and 2.5%, and the Dow Jones and the Russell 2000 losing about 1% and 0.04%, respectively. The tech-heavy Nasdaq surged due to the artificial intelligence (AI) frenzy, while other areas were under moderate pressure due to the debt ceiling negotiation process.
Blockbuster first-quarter fiscal 2024 earnings from Nvidia NVDA have led to bullishness across the sector, fueling a rally in stocks. The technology sector of the S&P 500 experienced a remarkable rise of 4.2% on May 25, marking its largest one-day gain since Nov 30. In fact, the semiconductor space has been on fire, with the Philadelphia Semiconductor Index jumping 5.9% to hit its highest level in more than a year (read: Tech ETFs Burning Hot on AI-Fueled Nvidia Surge).
Meanwhile, the debate between Democrat and Republican lawmakers continued over increasing the $31 trillion debt limit, reached in January, with divergent approaches to government spending and debt management. The impasse has reignited concerns about the United States' medium-term fiscal challenges, potentially affecting its credit rating.
Amid this tumult, the Federal Reserve faces its own set of challenges. Its recent meetings have revealed a split in opinion on the future direction of interest rates, balancing between the need for increases to counter inflation and a potential slowdown in economic growth. This division reflects the evolving market dynamics and uncertainties, pushing the Fed toward a more data-dependent approach.
Against this backdrop, below, we highlight a few top-performing inverse/leveraged ETF areas of last week.
ETF Areas in Focus
Leveraged Nvidia
Graniteshares NVDA 1.5X Daily ETF NVDL – Up 36.6%
Nvidia topped both earnings and revenue estimates buoyed by the strength of its data center business. It offered a bullish revenue outlook for the current quarter on the excitement surrounding an investment boom in AI technologies.
The optimism has pushed Nvidia shares to an all-time high and closer to the $1 trillion market cap. It was up 24.4% at the close, marking the largest one-day percentage gain since 2016. More than two dozen Wall Street analysts have turned super bullish and raised their price targets on Nvidia stock after the company's lead in AI.
Leveraged Semiconductor
Semiconductor Bull 3X Direxion SOXL – Up 31.6%
The optimism around Nvidia shares acted as a cornerstone to the entire semiconductor space. Other chipmaker stocks like Advanced Micro Devices (AMD), Taiwan Semiconductor (TSM), and Arista Networks (ANET), and AI players like Microsoft (MSFT) and Google parent Alphabet (GOOGL) also soared.
Inverse Leveraged Natural Gas
Ultrashort Bloomberg Natural Gas -2X ETF KOLD – Up 24.3%
There has been a slight decline in natural gas markets due to ongoing worries about industrial demand for this energy source. In any case, throughout the summer months, natural gas demand tends to be subdued, leading to fluctuating and repetitive movements in the market. Consequently, short-term trading takes precedence over long-term investments in this particular market.
Inverse Leveraged Natural Gas
Microsectors Gold Miners -3X ETN GDXD – Up 18.3%
Gold prices recorded its third consecutive weekly decline as traders evaluated the developments in the U.S. debt ceiling negotiations and anticipated the next steps by the Federal Reserve in terms of its monetary policy. The prevailing market sentiment is strongly inclined towards a resolution of the debt crisis, while the overall tightening stance of the Fed is anticipated to exert downward pressure on gold. As a result, inverse leveraged gold mining ETF surged.
Inverse Leveraged China
FTSE China Bear -3X Direxion (YANG) – Up 11.5%
The subdued economic recovery in China, coupled with Beijing's hesitance to implement extensive stimulus measures, is having widespread repercussions worldwide. This has resulted in a decline in commodity prices and a weakening of equity markets. Investors are scaling back their projections for the second-largest global economy, expressing concerns that its rebound from pandemic-induced restrictions is losing momentum.
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NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Direxion Daily Semiconductor Bull 3X Shares (SOXL): ETF Research Reports
ProShares UltraShort Bloomberg Natural Gas (KOLD): ETF Research Reports
Direxion Daily FTSE China Bear 3X Shares (YANG): ETF Research Reports
MicroSectors Gold Miners -3X Inverse Leveraged ETNs (GDXD): ETF Research Reports
GraniteShares 1.5x Long NVDA Daily ETF (NVDL): ETF Research Reports
