Direxion Daily Semiconductors Bull 3x Shares (SOXL) plummeted 13.20% intraday on Tuesday. The leveraged exchange-traded fund, which seeks daily investment results equal to 300% of the performance of the Philadelphia Semiconductor Index, experienced significant selling pressure during the trading session.
The decline follows a historic 18-day winning streak in the underlying semiconductor sector—the longest since 1994—which accumulated a monthly rally of approximately 38.5%. Market participants attributed the sharp pullback to widespread profit-taking activity after the parabolic run in semiconductor stocks. Technical gap-filling dynamics also contributed to the selling pressure.
Adding to the downward momentum, prominent investor Michael Burry publicly warned that the semiconductor rally was largely driven by technical factors rather than fundamentals. Burry stated he would sell semiconductor long positions at current levels, expressing skepticism about the sustainability of the chip-shortage narrative tied to data-center expansion. As a triple-leveraged product, SOXL amplifies daily index movements by a factor of three, resulting in magnified price swings in both directions.