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Wall Street lost its sheen at the start of the new year as volatility flared up. Rising inflation fears, uncertainty surrounding future Fed rate cuts and ambiguity over Trump’s tariff policies have been weighing on the stock market. Notably, all three major indices registered two consecutive weeks of decline in the first two weeks. 

However, the stocks regained momentum last week on dual tailwinds of cooling inflation data and a slew of solid results from the financial sector. The S&P 500 jumped 2.9%, while the Dow Jones rose 3.7%. The tech-heavy Nasdaq Composite Index gained 2.4%. The S&P 500 and Dow registered their biggest weekly percentage gains since early November and the Nasdaq recorded its best since early December.

This has resulted in huge demand for leveraged ETFs as investors look to register big gains in a short span. We have highlighted a bunch of the best-performing leveraged equity ETFs from different corners of the market that have gained in double digits in the initial weeks of 2025. These include MicroSectors Gold Miners 3X Leveraged ETN (GDXU - Free Report) , Direxion Daily S&P Oil & Gas Exploration & Production Bull 2X Shares (GUSH - Free Report) , Direxion Daily Semiconductor Bull 3x Shares (SOXL - Free Report) , Direxion Daily Crypto Industry Bull 2X Shares (LMBO - Free Report) and Direxion Daily Homebuilders & Supplies Bull 3X Shares (NAIL - Free Report).

These funds seek to register big gains in a short span and will continue their strong trend, at least in the near term, provided the sentiments remain bullish. Leveraged ETFs provide multiple exposures (2X or 3X) to the daily performance of the underlying index. These funds employ various investment strategies, such as the use of swaps, futures contracts and other derivative instruments to accomplish their objectives.

The bouts of upbeat data on the job market and manufacturing activity have sparked fears of inflation and cast doubt on further interest rate cuts. Additionally, uncertainty about Trump’s tariff policies has made investors jittery. 

Last week, inflation and retail sales data impressed investors. Inflation in December eased for the first time since July, bolstering the case that the Fed’s interest rate-cutting cycle is not over yet. Excluding volatile food and energy costs, so-called core prices rose 0.2% over the prior month, a deceleration from November's 0.3% monthly gain. Retail sales rose 0.4% in December, pointing to strong consumer demand.

Investors' sentiment was further boosted by impressive bank earnings from the likes of JPMorgan Chase (JPM) and Goldman Sachs (GS). These firms reported surging profits, thanks to a dealmaking revival and investment banking strength. BlackRock (BLK), Wells Fargo (WFC) and BNY (BK) also came out with blockbuster results.

Trump unleashed a historic wave of executive orders after taking office on Jan. 20, which is yet to be priced in the stocks.

ETFs in Focus

MicroSectors Gold Miners 3X Leveraged ETN (GDXU) – Up 23.8%

MicroSectors Gold Miners 3X Leveraged ETN seeks to deliver three times the performance of the S-Network MicroSectors Gold Miners Index. It has amassed $283.1 million in its asset base and charges 95 bps in annual fees. MicroSectors Gold Miners 3X Leveraged ETN trades in an average daily volume of 1 million shares.

Direxion Daily S&P Oil & Gas Exploration & Production Bull 2X Shares (GUSH) – Up 20.3%

Direxion Daily S&P Oil & Gas Exploration & Production Bull 2X Shares offers two times exposure to the daily performance of the S&P Oil & Gas Exploration & Production Select Industry Index. It has accumulated $354.4 million in its asset base and the average daily volume is solid at around 715,000 shares. Direxion Daily S&P Oil & Gas Exploration & Production Bull 2X Shares charges 97 bps in annual fees.

Direxion Daily Semiconductor Bull 3x Shares (SOXL) – Up 19%

With AUM of $9.7 billion, Direxion Daily Semiconductor Bull 3x Shares targets the semiconductor corner of the technology sector with three times leveraged exposure to the NYSE Semiconductor Index. It charges 72 bps in fees per year and trades in an average daily volume of 67 million shares.

Direxion Daily Crypto Industry Bull 2X Shares (LMBO) – Up 18.3%

Direxion Daily Crypto Industry Bull 2X Shares seeks 200% exposure of the performance of the Solactive Distributed Ledger & Decentralized Payment Tech Index. It has amassed $4.5 million in its asset base and charges 95 bps in annual fees. Direxion Daily Crypto Industry Bull 2X Shares trades in an average daily volume of 8,000 shares. 

Direxion Daily Homebuilders & Supplies Bull 3X Shares (NAIL) - Up 16.2%

Direxion Daily Homebuilders & Supplies Bull 3X Shares provides leveraged exposure to homebuilders. It creates a three-times-long position in the Dow Jones U.S. Select Home Construction Index, charging an annual fee of 93 bps. Direxion Daily Homebuilders & Supplies Bull 3X Shares trades in a good average daily volume of about 342,000 shares and has accumulated $339.8 million in its asset base.

Bottom Line

As a caveat, investors should note that these products are extremely volatile and suitable only for short-term traders. Additionally, the daily rebalancing, when combined with leverage, may make these products deviate significantly from the expected long-term performance figures.

Yet, for ETF investors who are bullish on these sectors in the near term, any of the abovementioned products can be an interesting choice. A near-term long could be intriguing for those with high-risk tolerance and a belief that the trend is the friend in this corner of the investing world.

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