Best-Performing Leveraged ETFs of Last Week

U.S. equities closed lower on July 11, 2025, as renewed trade tensions, stemming from President Trump's announcement of new tariffs—including 35% on Canada and 30% on the EU and Mexico—and hints of broader global duties, eventually weighed on market sentiment despite initial resilience; Barclays cautioned that the long-term economic impact of these escalations remains unclear. Concurrently, Bitcoin surged to a new all-time high above $118,000, driven by robust institutional demand and ETF inflows ahead of upcoming Congressional regulatory debates. This market backdrop also spurred strong performance in leveraged ETFs across cannabis, cryptocurrency, and aerospace sectors, with Rocket Lab notably benefiting from escalating tensions between Trump and Elon Musk.

Analysis

The U.S. market is exhibiting significant divergence, with broad indices like the Dow Jones (-1%) and S&P 500 (flat) weighed down by escalating trade policy risks, while the Nasdaq Composite (+0.5%) shows resilience. President Trump's announcement of a 35% tariff on Canada and 30% on the EU and Mexico, coupled with threats of a 15-20% global blanket duty, reversed earlier market optimism and caused a sell-off on July 11. Despite the market initially shrugging off tariffs on Brazil and copper to hit a record high, sentiment soured, validating a Barclays note that cautioned investor optimism might be premature given the unclear long-term economic effects of such trade escalations.

Contrasting with the macro uncertainty, specific sectors are driven by powerful idiosyncratic catalysts. The cryptocurrency market is experiencing a significant bull run, with Bitcoin surging past $118,000 on strong institutional ETF inflows ahead of a pivotal 'Crypto Week' in Congress. This has directly fueled substantial gains in leveraged crypto-linked ETFs like CONL and ETHU. Concurrently, political dynamics are creating clear winners and losers. Tensions between President Trump and Elon Musk, particularly over the 'Big, Beautiful Bill' which reduces renewable energy support, have negatively impacted Tesla. Conversely, this friction has benefited rival Rocket Lab (RKLB), which surged 9%. The U.S. cannabis sector is also outperforming, with leveraged ETF MSOX gaining over 40% on indications that the administration supports rescheduling.

Key Decisions for Investors

• Given the escalating and unpredictable tariff environment, investors should consider hedging broad market exposure or reducing positions in companies highly sensitive to global trade, as the long-term economic impact remains a significant headwind.
• Monitor political developments closely, as friction between the administration and corporate leaders like Elon Musk is creating significant idiosyncratic risk for companies like Tesla, while simultaneously generating opportunities for competitors such as Rocket Lab.
• Tactical traders may find opportunities in high-momentum sectors with specific catalysts, such as cryptocurrency-related assets (COIN, SOFI) and U.S. cannabis stocks (MSOS), which are currently benefiting from regulatory and legislative tailwinds.
• Investors with exposure to digital assets should pay close attention to the upcoming 'Crypto Week' in Congress, as the outcome of regulatory debates, including the GENIUS Act for stablecoins, could substantially alter the market's trajectory.