ProShares UltraPro Short QQQ (NASDAQ:SQQQ) is soaring in Friday afternoon trading, as a perfect storm of severe geopolitical threats and dismal economic data sends investors fleeing from technology stocks. The surge highlights a classic “risk-off” day on Wall Street, with traders piling into bearish instruments.
What To Know: SQQQ is a 3x leveraged inverse ETF. It is designed to deliver three times the opposite of the daily performance of the Nasdaq-100 Index, which is heavily weighted with technology and growth companies.
When the Nasdaq-100 falls by 2%, for example, SQQQ aims to rise by approximately 6%, making it a popular tool for traders looking to hedge against or profit from a downturn in the tech sector.
Today's market panic was ignited by a dual shock. First, reports emerged that President Donald Trump issued a nuclear threat to Russia, causing Wall Street’s “fear gauge,” the CBOE Volatility Index (VIX), to spike an astonishing 27%. This sent investors scrambling out of risk assets and into safe havens like gold.
Compounding the anxiety, this morning's U.S. labor report showed a major crack in the economy. July payrolls rose by a meager 75,000, far below expectations, and unemployment ticked up to 4.2%.
With the Nasdaq-100 falling around 2% on the news, SQQQ has become one of the day's top performers, providing a powerful return for traders betting against the market.
Price Action: According to data from Benzinga Pro, SQQQ is trading higher by some 6% to $19.53 late Friday.
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