Why the Nasdaq-100 Inverse ETF SQQQ Is Moving – ProShares UltraPro Short QQQ (NASDAQ:SQQQ)

ProShares UltraPro Short QQQ SQQQwhich provides leveraged inverse exposure to the Invesco QQQ Trust, Series 1 QQQrose 3% to $28.95 on Wednesday afternoon Federal Reserve struck a moderate tone during its December meeting.

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

What happened: The Fed cut interest rates by 25 basis points to a range of 4.25% to 4.5%, marking the third straight rate cut in 2023.

However, their updated forecasts suggest fewer cuts in 2025, suggesting continued higher borrowing costs. That fueled concerns that interest rate-sensitive tech stocks could struggle under tighter monetary conditions.

Additionally, the Fed raised inflation expectations for 2025, forecasting headline PCE inflation of 2.5%. Increased inflation could put pressure on future earnings and further weigh on growth stocks.

As interest-sensitive technology valuations recalibrate, traders could turn to SQQQ to capitalize on market volatility.

Also Read: Fed cuts rates by 0.25% as predicted: December dot plot shows only two possible rate 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.