The ProShares UltraPro Short QQQ (SQQQ), a leveraged inverse ETF that bets against the Nasdaq-100 Index, experienced a significant 6.19% drop on Tuesday. This sharp decline reflects a robust rally in tech stocks and a broader market recovery following Monday's steep sell-off.

The plunge in SQQQ is indicative of a strong rebound in the Nasdaq and other major indices. Monday's trading session saw the Dow Jones Industrial Average fall more than 970 points, with the S&P 500 and Nasdaq Composite both sliding over 2%. However, investor sentiment appears to have shifted dramatically, with traders looking to capitalize on oversold conditions and recover from the previous day's losses.

Several factors are contributing to the market's upward momentum. U.S. Treasury Secretary Scott Bessent's comments at a closed-door investor summit suggesting a potential de-escalation of trade tensions with China have helped ease some concerns. Additionally, the market seems to be shrugging off recent uncertainties surrounding President Donald Trump's criticism of Federal Reserve Chair Jerome Powell.

As SQQQ continues its downward trajectory, investors should remain cautious. The ETF's performance is highly sensitive to short-term market movements, and upcoming economic data releases and speeches from Fed officials could further influence market direction. The volatile nature of leveraged inverse ETFs like SQQQ underscores the importance of careful consideration and risk management in trading these instruments.