Direxion Daily Semiconductors Bull 3x Shares (SOXL) experienced a sharp 5.11% decline in pre-market trading on Wednesday, reflecting a broader sell-off in the semiconductor sector. The leveraged ETF's drop came as major chip stocks faced significant pressure, with Texas Instruments leading the downturn after issuing a disappointing quarterly profit forecast.

Texas Instruments, a bellwether for the semiconductor industry, saw its stock plummet 11% in overnight trading. The company's weak outlook raised concerns about demand for analog chips and highlighted ongoing uncertainties related to tariffs. This negative sentiment quickly spread across the sector, affecting other major players such as Microchip and ON Semiconductor, which both fell nearly 6%.

While chipmakers like Texas Instruments don't directly face elevated tariffs imposed by the U.S. administration, the industry is grappling with rising costs for chip-making tools and reduced spending from end customers. This development underscores the challenges facing the semiconductor sector amidst global trade tensions and economic uncertainties, factors that are likely to continue influencing SOXL and other chip-related investments in the near term.