Why Nasdaq-100 Leveraged ETF TQQQ Is Moving

ProShares UltraPro Short QQQ ETF SQQQ shares are trading higher by 2.16% to $42.62 Friday morning, rebounding following recent weakness. The leveraged ETF has seen increased volatilty this week after Fitch downgraded the long-term credit rating of the US. This has weighed on market sentiment and pressured growth sectors in recent sessions.

A credit rating downgrade of a major economy like the U.S. can lead to negative market sentiment. Investors may become more risk-averse and start selling off riskier assets, including leveraged ETFs like TQQQ.

The fear and uncertainty surrounding the downgrade can create a broad-based market sell-off, affecting all types of equities, including technology stocks represented by TQQQ.

Additionally, the technology sector, which TQQQ seeks to track, relies heavily on global trade and economic stability. A credit rating downgrade may lead to concerns about economic growth prospects and potential trade disruptions, affecting tech companies' revenue and earnings expectations.

This, in turn, can cause investors to sell technology stocks and ETFs like TQQQ.

What Happened With Fitch?

In a move that sent shockwaves through global markets, Fitch Ratings downgraded the United States’ sovereign credit grade from AAA to AA+. This downgrade, echoing a move by S&P Global more than a decade ago, comes as a result of several concerning factors affecting the nation’s fiscal management...Read More

According to data from Benzinga Pro, TQQQ has a 52-week high of $47.14 and a 52-week low of $16.10.