ProShares UltraPro Short QQQ (SQQQ), an inverse ETF that seeks to deliver three times the inverse daily performance of the Nasdaq-100 Index, plunged 5.02% in pre-market trading on Tuesday. This sharp decline comes as the broader stock market shows signs of recovery following Monday's significant sell-off.

The downward movement in SQQQ reflects an anticipated upswing in the Nasdaq and other major indices. Investors appear to be regaining confidence after Monday's steep losses, which saw the Dow drop more than 970 points and both the S&P 500 and Nasdaq Composite slide over 2%. The market's positive sentiment is partly driven by traders looking to buy the dip and recover from the previous day's losses.

While SQQQ's plummet indicates a potential rally in tech stocks, investors should remain cautious. The market continues to grapple with uncertainties surrounding Federal Reserve policies and recent criticisms from President Donald Trump towards Fed Chair Jerome Powell. As the trading day progresses, market participants will closely monitor manufacturing survey results from the Richmond Fed and speeches from several Fed officials for further directional cues.