Wall Street delivered lackluster performances last week, mainly due to rising rate worries. The S&P 500 Index was off 2.4%, the Dow Jones was down 1.6%, the Nasdaq lost 3.2% and the Russell 2000 retreated 2.3% last week (read: Sector ETFs to Win/Lose Amid Surging Treasury Yields).

U.S. Treasury yields have been surging lately, driven by expectations that the Fed will keep interest rates higher for longer to fight inflation. The U.S. jobs market has been hot despite higher rates while U.S. consumers have been resilient despite high inflation. Retail sales data for the month of September came in at upbeat. This may lead the Fed to enact one more rate hike in November this year.

The benchmark U.S. treasury yield started the week at 4.71%, hit a weekly high of 4.98% on Oct 19 and stood at 4.93% as of Oct 20, 2023. Though the Israel-Gaza war boosted oil and gold prices, U.S. treasuries failed to live up to their safe-haven status. The gold bullion ETF SPDR Gold Shares (GLD Quick QuoteGLD - Free Report) advanced 3.2% last week, while Brent crude oil ETF (BNO Quick QuoteBNO - Free Report) was up by 2.5%.

Against this backdrop, below, we highlight a few top-performing inverse/leveraged ETF areas of last week.

ETFs in Focus

Inverse/Leveraged Tesla ETF – GraniteShares 1.5x Short TSLA Daily ETF (TSDD Quick QuoteTSDD - Free Report) ) – Up 27%

Tesla’s stock slumped about 15% last week as the company reported weaker-than-expected Q3 results, missing estimates on both fronts. The electric automaker posted its lowest profit in two years as it slashed prices to boost demand in the face of rising interest rates (read: Tesla Posts Weak Q3 Earnings: ETFs in Focus).

Inverse/Leveraged Auto – MAX Auto Industry -3x Inverse Leveraged ETN (CARD Quick QuoteCARD - Free Report) ) – Up 24.9%

The underlying index — the Prime Auto Industry Index — tracks the stock prices of U.S.-listed companies that have operations relating to the automobile industry, including automobile manufacturing, parts and retail, and new and used car dealers. The industry has been under stress lately due to the United Auto Workers union strike, Tesla’s margin woes, high inflation and higher rates.

Inverse/Leveraged China – Direxion Daily FTSE China Bear 3X Shares (YANG Quick QuoteYANG - Free Report) ) – Up 17.8%

The underlying FTSE China 50 Index consists of the 50 largest and most liquid public Chinese companies currently trading on the Hong Kong Stock Exchange. China’s property woes more than nullified stimulatve measures to boost stocks. Chinese stocks, in fact, erased all of their gains since Beijing ended its zero-COVID policy. This is an indication that investors are still fearing the ongoing property crisis and other headwinds facing the economy.

Inverse/Leveraged U.S. Treasuries – ProShares UltraPro Short 20+ Year Treasury (TTT Quick QuoteTTT - Free Report) – Up 16.7%

The underlying ICE U.S. Treasury 20+ Year Bond Index includes publicly-issued U.S. Treasury securities that have a remaining maturity greater than 20 years and have $300 million or more of outstanding face value, excluding amounts held by the Federal Reserve. As rising rates were prevalent in the week, bond prices fell as yield and bond prices are inversely co-related.

Inverse/Leveraged Natural Gas– ProShares UltraShort Bloomberg Natural Gas (KOLD Quick QuoteKOLD - Free Report) ) – Up 16.6%

The underlying Bloomberg Natural Gas Subindex is intended to reflect the natural gas segment of the commodities market. The index consists of futures contracts on natural gas. Predictions of insipid weather-related demand weighed on natural gas prices. Normally, changes in temperature and weather forecasts can lead to price swings as this determines demand for heating. With forecasts for milder weather in the days ahead, the usage of the commodity to generate electricity to meet cooling demand is expected to be tepid.