In a market whipsawed by AI hype, tariff fears and geopolitical headlines, today's traders are not committing – they're swiping right on volatility and moving fast. The most active market participants are increasingly using leveraged and inverse ETFs to play quick, high-conviction moves – not long-term narratives, Jake Behan, head of Capital Markets at Direxion, told Benzinga in an exclusive Q&A email.

A case in point: Palantir Technologies Inc (NASDAQ:PLTR). After a solid earnings report in May, its stock plunged over 12% as investors questioned whether the company's AI-fueled growth spurt was sustainable. That didn't stop flows. Direxion saw activity in both its Direxion Daily PLTR Bull 2X Shares (NASDAQ:PLTU) and the Direxion Daily PLTR Bear 1X Shares (NASDAQ:PLTD), highlighting just how split sentiment has become around tech darlings.

"Valuations are under scrutiny and the durability of growth is being tested," says Behan. Traders are watching everything from Chinese demand to AI monetization to capital expenditure trends – but they're expressing those views tactically. Direxion's single-stock suite saw massive action around earnings and tariffs, with $3.6 billion in inflows in April alone, led by the Direxion Daily Semiconductor Bull 3x Shares (NYSE:SOXL), its 3X bull semiconductor ETF.

Meanwhile, traditional hedges are falling out of favor. Instead, traders are deploying -1X ETFs as quick hedging tools, especially during headline-sensitive windows, notes Behan. This is visible in inverse funds like the Direxion Daily Semiconductor Bear 3x Shares (NYSE:SOXS), Direxion Daily AAPL Bear 1X Shares (NASDAQ:AAPD) and Direxion Daily FTSE China Bear 3x Shares (NYSE:YANG), which saw weekly inflows during tariff-related drawdowns and macro data surprises.