Direxion Daily 20 Year Plus Treasury Bull 3x Shares (TMF), a leveraged ETF tracking long-term Treasury bonds, surged 5.06% in pre-market trading on Wednesday. The move reflects the recent spike in long-term Treasury yields, driven by an increase in the "term premium" - the compensation investors demand for holding longer-term bonds.

According to market analysts, the term premium has spiked due to uncertainty surrounding the new administration's fiscal policies. Concerns over potential high levels of government debt issuance to finance tax cuts and spending plans have led investors to demand a higher premium for holding longer-dated bonds, pushing up yields.

The rise in long-term Treasury yields directly benefits leveraged bond ETFs like TMF, which provides 3x daily exposure to the performance of 20+ year Treasury bonds. As yields climb, the value of these existing long-term bonds rises, amplifying the gains for TMF's leveraged portfolio.