ProShares UltraPro Short QQQ ETF (NASDAQ:SQQQ) shares are trading lower by 1.6% to $18.19 Wednesday morning. The ETF is trading lower following worse-than-expected U.S. inflation data.

In the immediate aftermath of unexpected news, such as a significant inflation spike, markets can often exhibit a counterintuitive reaction. While one might expect an inverse leveraged ETF like SQQQ to rise due to concerns about inflation's impact on the tech-heavy NASDAQ-100 Index, it's essential to remember that these ETFs are designed for short-term trading and are based on daily returns.

SQQQ is primarily designed for short-term trading and market timing strategies. Some investors may use it as a tool to take advantage of anticipated market downturns or as a tactical way to implement short-term trading strategies based on their outlook for the NASDAQ-100 Index.

Inflation Surges Beyond Expectations In August

The annual CPI inflation rate soared from 3.2% in July to a notable 3.7% in August 2023, surpassing economist expectations of a 3.6% increase.

On a monthly basis, the CPI accelerated sharply, rising by 0.6% in August, a stark contrast to the 0.2% increase seen in July, but in line with expectations. This marked the sharpest monthly CPI increase since June 2022...Read More

According to data from Benzinga Pro, SQQQ has a 52-week high of $69.55 and a 52-week low of $16.38.

Why Nasdaq-100 Inverse ETF SQQQ Is Moving