Direxion Daily S&P 500 Bear 1X ETF

SPDN

Market cap $229M

Inverse ETFs like SH and SPDN could benefit as Middle-East tensions and rising volatility keep U.S. markets under pressure.

2025 has been a rollercoaster ride for traders. After quickly dropping nearly 20% during the tariff sell-off, the S&P 500® Index* has rapidly rebounded from its April low to fresh all-time highs.

The SPDN ETF offers a way to bet against the market, moving inversely to the S&P 500, but it's not for long-term holding. Market's muted response to rate cuts suggests they're already priced in; high S&P 500 P/E ratio supports this sentiment. Weak economic data, potential oil price spikes, and slowing consumer demand could negatively impact market valuations and company earnings.

Wall Street is on the verge of inking a conspicuous downcycle for the week, with the major indices flashing red in late-afternoon trading on Friday. The benchmark S&P 500 is down about 0.7% against Thursday's close, and is about to book a loss of more than 2% for the business week ending July 19.

Wall Street wavered this week on high inflation data which lowered chances of an imminent Fed rate cut. Plus, geopolitical tension in Middle East has weighed on stocks.

While the buy-and-hold strategy makes the most intuitive sense, it's boring, which invariably leads curious investors down the path toward inverse ETFs. Just like any other exchange-traded fund, these bear trades represent a basket of securities under a single umbrella.