U.S. stock indices closed last week on a solid note as investors reacted to a favorable inflation report. The Dow Jones Industrial Average hit a new record. The S&P 500 advanced 0.6%, the Dow Jones added 0.6% and the Nasdaq Composite gained about 1% last week. Investor sentiment improved as confidence in the U.S. economy strengthened.

A robust GDP report and easing inflation fueled optimism. The Personal Consumption Expenditures (PCE) index, the Federal Reserve’s preferred inflation measure, showed a 0.1% month-over-month increase in the core PCE, undershooting Wall Street's expectations. This contributed to the growing belief that the Fed could achieve a "soft landing" as it begins to cut interest rates.

Rate Cut Bets Grow

Following the PCE data, traders boosted their expectations for a solid interest rate cut next month. Around 52% of market participants now anticipate (at the time of writing) a 50-basis point cut, indicating the market’s confidence in the Fed’s approach to monetary policy.

U.S. Economy Grows Faster Than Expected in Q2

The U.S. economy grew at an annualized rate of 3% in the second quarter of the year, surpassing Wall Street's expectations. According to the Bureau of Economic Analysis's third estimate, this growth rate remained unchanged from the previous estimate. Economists had estimated the reading to show an annualized growth of 2.9%. The second-quarter growth marks a significant improvement from the 1.4% annualized growth seen in the first quarter (read: 4 Reasons to Buy Small-Cap ETFs Now).

Chinese Stimulus Fuels Global Markets

On Sept. 24, 2024, China's central bank, the People’s Bank of China (PBOC), announced a broad range of monetary stimulus measures aimed at boosting the world's second-largest economy. This move indicates growing concerns within Xi Jinping's administration over the nation’s slowing growth and declining investor confidence.

China's stimulus efforts boosted global markets, with mainland stocks notching their biggest weekly win since 2008. Shares of Alibaba BABA, JD.com JD and Meituan jumped as investors showed renewed interest in Chinese equities (read: A Few Reasons to Buy China ETFs Now).

Semiconductor Stocks See Mixed Performance

Chipmakers registered varying performances last week. Micron MU stock fell 2.2% on Friday, despite a strong performance earlier in the week following an upbeat quarterly outlook driven by AI demand.

NVIDIA NVDA shares also came under pressure in the final leg of the week due to news that AI server maker Super Micro Computer SMCI, a major Nvidia customer, was under investigation by the Department of Justice for alleged accounting violations. Additionally, reports suggested that China was encouraging domestic firms to purchase AI chips locally instead of from NVIDIA.

Winning Leveraged ETFs in Focus

Against this backdrop, below we highlight a few winning leveraged ETFs of last week.

Direxion Daily CSI China Internet Index Bull 2x Shares CWEB – Up 56.8% last week

Direxion Daily Electric and Autonomous Vehicles Bull 2X Shares EVAV – Up 28.3%

Direxion Daily Uranium Industry Bull 2X Shares URAA – Up 25.8%

GraniteShares 2x Long COIN Daily ETF CONL – Up 25%

Direxion Daily MSCI Emerging Markets Bull 3x Shares EDC – Up 20.1%

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Micron Technology, Inc. (MU) : Free Stock Analysis Report

NVIDIA Corporation (NVDA) : Free Stock Analysis Report

Super Micro Computer, Inc. (SMCI) : Free Stock Analysis Report

JD.com, Inc. (JD) : Free Stock Analysis Report

Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report

Direxion Daily MSCI Emerging Markets Bull 3x Shares (EDC): ETF Research Reports

Direxion Daily Uranium Industry Bull 2X Shares (URAA): ETF Research Reports

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