Why Nasdaq-100 Inverse ETF SQQQ Is Moving

ProShares UltraPro Short QQQ SQQQ, which offers leveraged inverse exposure to the Invesco QQQ Trust, Series 1 QQQ, gained 3% to $28.95 Wednesday afternoon as the Federal Reserve delivered a dovish tone during its December meeting.

SQQQ, designed to rise when the Nasdaq-100 falls, benefits from bearish sentiment toward growth-oriented technology stocks.

What Happened: The Fed lowered the federal funds rate by 25 basis points to a range of 4.25%-4.5%, marking the third consecutive rate cut in 2023.

However, its updated projections suggest fewer cuts in 2025, signaling persistently higher borrowing costs. This fueled concerns that tech stocks, which are sensitive to interest rates, may struggle under tighter monetary conditions.

Additionally, the Fed raised inflation expectations for 2025, projecting headline PCE inflation at 2.5%. Elevated inflation could pressure future earnings, further weighing on growth stocks.

As rate-sensitive tech valuations recalibrate, traders might turn to SQQQ to capitalize on market volatility.

Read Also: Fed Slashes Interest Rates By 0.25% As Predicted: December Dot Plot Flags Only 2 Potential Cuts In 2025

According to data from Benzinga Pro, SQQQ has a 52-week high of $74.80 and a 52-week low of $27.54.