What's Going On With Nasdaq-100 Leveraged ETF TQQQ

ProShares UltraPro QQQ TQQQ shares are trading lower by 0.7% to $34.24 Wednesday afternoon. The ETF is near session lows as Treasury yields rise during Wednesday's session. Rising oil prices are also weighing on the broader market.

For the unitiated, per ProShares, TQQQ seeks daily investment results, before fees and expenses, that correspond to three times (3x) the daily performance of the NASDAQ-100 QQQ ETF.

Why It Matters

Rising Treasury yields can lead to higher borrowing costs for corporations, which can negatively impact their profitability. This, in turn, can lead to lower stock prices for the companies included in the NASDAQ-100 Index and, consequently, for TQQQ, which seeks to track the index's performance.

TQQQ is heavily weighted toward the technology sector, and technology stocks are often sensitive to changes in interest rates. Higher interest rates can lead to higher discount rates applied to future cash flows, potentially reducing the present value of future earnings for tech companies.

This can lead to a decline in the stock prices of tech-related firms, which are major constituents of the NASDAQ-100 Index.

See Also: U.S. Stocks Struggle As Fed Sounds Hawkish

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