Impact of US-China Tariffs on ETF Market Volatility
The tariff war between the United States and China has amplified the losses of South Korean retail investors in leveraged ETFs. Many investors are employing an averaging-down strategy to lower the cost basis, but there are concerns that further market declines could exacerbate these losses. The Direxion Daily Semiconductor Bull 3X Shares ETF ranks first in net foreign securities purchases, highlighting the high interest of these investors in technology stocks and leveraged products.
President Trump's tariff policy is intensifying market volatility, with experts maintaining a cautious yet positive outlook until summer. The overall decline in the New York Stock Exchange is attributed to the uncertainty of tariff policies. Specifically, Tesla, which has become the most purchased US stock by Korean investors from January 20 to May 2, has suffered a loss rate of 32.27%, severely impacting investors. Direxion Tesla 2X and Semiconductor 3X ETFs have also plunged by 64.20% and 60.55%, respectively, leading to greater financial setbacks.
Recent easing in tariff pressures and the decline in 10-year Treasury yields have provided temporary relief to the markets. However, lingering uncertainties regarding tariff negotiations continue to pose threats to long-term market stability.
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