Why Nasdaq-100 Inverse ETF SQQQ Hit A New 52-Week Low

ProShares UltraPro Short QQQ ETF SQQQ shares are trading lower by 7.2% to $19.93 on a week-to-date basis. For the unitiated, SQQQ is a popular, 3x-leveraged inverse ETF that tracks the Nasdaq-100.

The ETF is falling Wednesday after Producer Price Index (PPI) for final demand slumped 0.3% month-on-month in May, down from the previous 0.2% monthly increase and below the expected 0.1% fall.

The PPI print follows the May consumer price index (CPI) reading, which came in lower than expected, supporting market belief that the Fed is nearing the end of its interest rate hike cycle.

Strength in large-cap semiconductor stocks and AI optimism has also driven the Nasdaq-100 higher by 37% on a year-to-date basis, contributing to the marked weakness in SQQQ in 2023.

See Also: 'No More Fed Hikes!' Economist Declares End Of Inflation Frenzy, Urges FOMC To Stop Tightening Now

SQQQ is primarily designed for short-term trading and market timing strategies. Some investors may use it as a tool to take advantage of anticipated market downturns or as a tactical way to implement short-term trading strategies based on their outlook for the Nasdaq-100 Index.

According to data from Benzinga Pro, SQQQ has a 52-week high of $69.55 and a 52-week low of $19.89.