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The S&P 500 added 6.4%, the Dow Jones advanced 4.2%, the Nasdaq advanced 9.9%, and the Russell 2000 gained 10.9% in the third quarter of 2025 (as of Sept. 25, 2025). Ebbing trade tensions boosted stocks in the third quarter, with the small caps grabbing special attention. Note that the Russell 2000 surged about 7% in August itself — its fourth consecutive monthly gain and strongest streak in over four years, as mentioned in a Yahoo Finance article.
U.S. Economy Giving Mixed Signals
While growth has been upbeat for the economy, the labor market started showing signs of weakness. Meanwhile, inflation remains steady.
Thanks to stronger consumer spending, the U.S. economy grew at an unexpectedly robust 3.8% pace in Q2 of 2025, marking an upward revision of second-quarter growth released by the government.
The Commerce Department said on Thursday that gross domestic product (GDP) bounced back in spring after a 0.6% decline in the first quarter, which had been hit hard by trade tensions. The new estimate is higher than the previously reported 3.3% growth (per AP news, as quoted on Yahoo Finance).
However, the U.S. economy added 22,000 jobs in August 2025, lower than an upwardly revised 79,000 in July and market forecasts of 75,000, as quoted on tradingeconomics. Jobs data for June was revised down by 27,000, and the change for July was revised up by 6,000.
The U.S. annual inflation rate grew to 2.9% in August 2025, the highest since January, after staying the same at 2.7% in both June and July, in line with market expectations, as quoted on tradingeconomics.
In a trio of posts on Truth Social on Sept. 25, 2025, President Trump announced that the U.S. will roll out a host of tariffs starting Oct. 1. The measures will cover imported kitchen cabinets, bathroom vanities, pharmaceutical products, and heavy trucks. Tariffs will range from 30% to 100%, though exemptions will apply to drugmakers currently building manufacturing plants in the United States, as quoted on Yahoo Finance.
AI Boom Stay Strong Despite Payoff Concerns
In Q3, we noticed several semiconductor and AI deals. NVIDIA announced deals with Intel, Open AI and Alibaba. On Sept. 30, 2025, CoreWeave stock gained about 12% as the company announced a $14-billion AI cloud deal with Meta, as quoted on Digitimes. However, some market watchers are analyzing that AI payoffs are lagging the pace of AI investments (read: Here's Why Semiconductor ETFs Are Hitting 52-Week Highs).
Winning ETF Areas
Against this backdrop, below we highlight a few exchange-traded fund (ETF) areas that have gained handosmely over the past three months (as of Sept. 26, 2025).
Defiance Daily Target 2X Long RGTI ETF (RGTX - Free Report) – Up 477.1%
The Defiance Daily Target 2X Long RGTI ETF seeks daily leveraged investment results of two times the daily percentage change in the share price of Rigetti Computing, Inc. – a pioneer in full-stack quantum-classical computing company. The fund charges 131 bps in fees.
Tradr 2X Long APP Daily ETF (APPX - Free Report) – Up 235.3%
The Tradr 2X Long APP Daily ETF seeks daily investment results, before fees and expenses, that correspond to two times the daily performance of the common shares of AppLovin Corp.AppLovin Corporation provides a technology platform, which enables developers to market, monetize, analyze and publish their apps. The fund charges 130 bps in fees.
Tradr 2X Long QBTS Daily ETF (QBTX - Free Report) – Up 189.9%
The Tradr 2X Long QBTS Daily ETF seeks daily investment results, before fees and expenses, that correspond to two times the daily performance of the common shares of D-Wave Quantum Inc. The fund charges 130 bps in fees.
The MicroSectors Gold Miners 3X Leveraged ETNs is linked to a three-times leveraged participation in the performance of the S-Network MicroSectors Gold Miners Index. While tech stocks related to quantum computing have been hot bets now, gold mining stocks have also been sizzling. The fund charges 95 bps in fees.
Defiance Daily Target 2X Long SOFI ETF (SOFX - Free Report) – Up 151.6%
The Defiance Daily Target 2X Long SOFI ETF seeks daily leveraged investment results of two times the daily percentage change in the share price of SoFi Technologies, Inc. The fund charges 129 bps in fees.
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Best-Performing Leveraged ETFs of Q3
The S&P 500 added 6.4%, the Dow Jones advanced 4.2%, the Nasdaq advanced 9.9%, and the Russell 2000 gained 10.9% in the third quarter of 2025 (as of Sept. 25, 2025). Ebbing trade tensions boosted stocks in the third quarter, with the small caps grabbing special attention. Note that the Russell 2000 surged about 7% in August itself — its fourth consecutive monthly gain and strongest streak in over four years, as mentioned in a Yahoo Finance article.
U.S. Economy Giving Mixed Signals
While growth has been upbeat for the economy, the labor market started showing signs of weakness. Meanwhile, inflation remains steady.
Thanks to stronger consumer spending, the U.S. economy grew at an unexpectedly robust 3.8% pace in Q2 of 2025, marking an upward revision of second-quarter growth released by the government.
The Commerce Department said on Thursday that gross domestic product (GDP) bounced back in spring after a 0.6% decline in the first quarter, which had been hit hard by trade tensions. The new estimate is higher than the previously reported 3.3% growth (per AP news, as quoted on Yahoo Finance).
However, the U.S. economy added 22,000 jobs in August 2025, lower than an upwardly revised 79,000 in July and market forecasts of 75,000, as quoted on tradingeconomics. Jobs data for June was revised down by 27,000, and the change for July was revised up by 6,000.
The U.S. annual inflation rate grew to 2.9% in August 2025, the highest since January, after staying the same at 2.7% in both June and July, in line with market expectations, as quoted on tradingeconomics.
Fed Rate Cut to Address Weakening Labor Market
The Fed enacted its first rate cut of 2025 in September and also hinted at further cuts this year. At the time of writing, there are 5.4% chances of a 25-bp rate cut in the October meeting, per the CME FedWatch Tool, while chances of a 50-bp cut is 94.6% (read: Fed Cuts Rates & Hints at Two More Cuts in 2025: ETFs to Play).
Moderate Comeback of Tariff Tensions
In a trio of posts on Truth Social on Sept. 25, 2025, President Trump announced that the U.S. will roll out a host of tariffs starting Oct. 1. The measures will cover imported kitchen cabinets, bathroom vanities, pharmaceutical products, and heavy trucks. Tariffs will range from 30% to 100%, though exemptions will apply to drugmakers currently building manufacturing plants in the United States, as quoted on Yahoo Finance.
AI Boom Stay Strong Despite Payoff Concerns
In Q3, we noticed several semiconductor and AI deals. NVIDIA announced deals with Intel, Open AI and Alibaba. On Sept. 30, 2025, CoreWeave stock gained about 12% as the company announced a $14-billion AI cloud deal with Meta, as quoted on Digitimes. However, some market watchers are analyzing that AI payoffs are lagging the pace of AI investments (read: Here's Why Semiconductor ETFs Are Hitting 52-Week Highs).
Winning ETF Areas
Against this backdrop, below we highlight a few exchange-traded fund (ETF) areas that have gained handosmely over the past three months (as of Sept. 26, 2025).
Defiance Daily Target 2X Long RGTI ETF (RGTX - Free Report) – Up 477.1%
The Defiance Daily Target 2X Long RGTI ETF seeks daily leveraged investment results of two times the daily percentage change in the share price of Rigetti Computing, Inc. – a pioneer in full-stack quantum-classical computing company. The fund charges 131 bps in fees.
Tradr 2X Long APP Daily ETF (APPX - Free Report) – Up 235.3%
The Tradr 2X Long APP Daily ETF seeks daily investment results, before fees and expenses, that correspond to two times the daily performance of the common shares of AppLovin Corp.AppLovin Corporation provides a technology platform, which enables developers to market, monetize, analyze and publish their apps. The fund charges 130 bps in fees.
Tradr 2X Long QBTS Daily ETF (QBTX - Free Report) – Up 189.9%
The Tradr 2X Long QBTS Daily ETF seeks daily investment results, before fees and expenses, that correspond to two times the daily performance of the common shares of D-Wave Quantum Inc. The fund charges 130 bps in fees.
MicroSectors Gold Miners 3X Leveraged ETNs (GDXU - Free Report) – Up 152.3%
The MicroSectors Gold Miners 3X Leveraged ETNs is linked to a three-times leveraged participation in the performance of the S-Network MicroSectors Gold Miners Index. While tech stocks related to quantum computing have been hot bets now, gold mining stocks have also been sizzling. The fund charges 95 bps in fees.
Defiance Daily Target 2X Long SOFI ETF (SOFX - Free Report) – Up 151.6%
The Defiance Daily Target 2X Long SOFI ETF seeks daily leveraged investment results of two times the daily percentage change in the share price of SoFi Technologies, Inc. The fund charges 129 bps in fees.