ProShares UltraPro Short QQQ (SQQQ), an exchange-traded fund (ETF) designed to deliver three times the inverse daily performance of the Nasdaq-100 Index, experienced a significant surge of 6.31% in intraday trading on Wednesday. This remarkable uptick comes on the heels of disappointing U.S. economic data, which has ignited concerns about the health of the tech sector and the broader economy.

The catalyst for SQQQ's rally appears to be the release of the advance estimate for U.S. GDP growth in the first quarter of 2025. According to the report, the economy unexpectedly contracted by 0.3% on a quarter-over-quarter basis, falling short of economists' expectations of 0.3% growth and marking a sharp decline from the previous quarter's 2.4% expansion. This unanticipated economic contraction has raised fears of a potential slowdown in the tech-heavy Nasdaq-100 index, which SQQQ is designed to inversely track.

SQQQ's strong performance reflects growing investor pessimism towards the tech sector and the broader market. As an inverse ETF, SQQQ is designed to deliver amplified returns when the Nasdaq-100 declines. The fund's 6.31% increase suggests that traders are anticipating a significant drop in tech stocks following the weak GDP print. However, it's crucial for investors to understand that leveraged and inverse ETFs like SQQQ are primarily designed for short-term trading and can be highly volatile. As economic conditions rapidly evolve, traders should exercise caution and fully comprehend the risks associated with these complex financial products.