Best-Performing Leveraged ETFs of Last Week

Wall Street indices advanced last week, with the S&P 500, Dow, and Nasdaq gaining on easing geopolitical and tariff tensions. This bullish sentiment was supported by top US banks announcing Q3 dividend hikes following successful stress tests and nonfarm payrolls rising by 147,000 in June 2025, exceeding forecasts. However, analysts signal caution due to murky economic data, including a downward revision to Q1 GDP growth and jobless claims reaching their highest since 2021. Concurrently, the House narrowly passed a sweeping economic bill, the 'Big, Beautiful Bill,' on July 3, 2025, featuring contentious healthcare cuts and a pivot away from federal clean energy support, while several leveraged ETFs posted significant gains.

Analysis

Wall Street posted broad gains last week, with the S&P 500 rising 2.1% and the Dow Jones 3%, driven by diminished geopolitical and trade tensions. This positive sentiment was reinforced by two key developments: major U.S. banks announced third-quarter dividend increases after successfully passing the Federal Reserve's annual stress tests, signaling strong capital positions, and the June 2025 nonfarm payrolls report exceeded expectations, adding 147,000 jobs against a forecast of 110,000. However, a significant undercurrent of caution persists due to conflicting economic indicators. Analysts point to a downward revision in Q1 GDP, a slight increase in PCE inflation, and jobless claims reaching their highest level since 2021, suggesting underlying softness in the labor market despite the headline payroll figure. Furthermore, the narrow passage of the 'Big, Beautiful Bill' introduces policy uncertainty, particularly for the healthcare sector due to coverage cuts and for the renewable energy industry, which faces a pivot away from federal support. The extreme weekly gains in several single-stock 2X leveraged ETFs, such as those tracking D-Wave Quantum (QBTX up 39.1%) and Riot Platforms (RIOX up 31.7%), highlight pockets of high-risk, speculative appetite that contrast sharply with the murky macroeconomic outlook.

Key Decisions for Investors

• Given the conflicting signals between positive market indices and weakening underlying data like rising jobless claims, investors should consider trimming exposure to high-beta assets and exercise caution despite the recent rally.
• The passage of the new economic legislation necessitates a review of portfolios, specifically to assess potential negative impacts on holdings in the healthcare and clean energy sectors due to reduced federal support.
• The successful stress tests and subsequent dividend hikes by major banks suggest relative strength and resilience in the financial sector, making it a potentially attractive area for capital allocation amidst broader economic uncertainty.
• Investors should avoid chasing the recent outsized returns in speculative, leveraged ETFs, as their performance is tied to highly volatile individual stocks and does not reflect the health of the overall market.