The ProShares Ultra VIX Short-Term Futures ETF (UVXY) experienced a dramatic surge of 21.18% in intraday trading, as market volatility spiked in response to escalating trade tensions between China and the United States. This significant movement underscores the ETF's high sensitivity to changes in market fear and uncertainty.

The catalyst for this surge was a sharp increase in the VIX index, often referred to as Wall Street's "fear gauge." The VIX briefly soared by an astonishing 52% to reach 45.56, its highest level since October 2020. This spike was triggered by China's announcement of retaliatory tariffs against the United States, reigniting concerns about the potential economic impact of an intensifying trade war between the world's two largest economies.

UVXY's strong performance was mirrored by other volatility-linked ETFs, although to varying degrees. Notable movements included a 19% rise in UVIX, while VIXY and VXX both climbed 10%. The leveraged nature of UVXY, which aims to deliver 1.5 times the daily performance of the S&P 500 VIX Short-Term Futures Index, explains its outsized gains compared to some of its peers. This event serves as a stark reminder of the potential for significant short-term gains - and losses - in volatility-linked products during periods of market turmoil.