A Bad Day for Chip Stocks Is a Much Worse Day for This Bullish ETF
One morning of chip selloff turned a tidy $10,000 bet into something far smaller, and election fears and a weak forecast were only part of the story. The real culprit is built into how this fund works every single day.
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A $10,000 position in ProShares Ultra Semiconductors (NYSEARCA:USD) at Wednesday’s close was worth $8,428 by late Thursday morning. That’s a paper loss of -$1,572 in about two hours of trading, after a broad drop in chip stocks.
The fund fell 15.72%, from a prior close of $65.28 to $55.02 as of 11:29 AM ET on November 5, 2026, based on a delayed quote. The ticker USD belongs to this fund. It has nothing to do with the U.S. dollar.
The $10,000 example assumes the position was worth exactly $10,000 at Wednesday’s close. All of today’s figures are intraday, and the fund’s move could look different by the closing bell.
Election Fears and a Weak Forecast Hit Chipmakers
24/7 Wall St. reported this morning that chipmakers were continuing a selloff. Investors fear that a Democrat-controlled Congress could tighten AI rules and slow data center construction. Democrats won both chambers of Congress in the November 3 midterm elections.
A delayed quote at 11:32 AM ET showed NVIDIA down 7.08% at $185.97.
Company-specific news added to the pressure. CNBC reported that Qualcomm (NASDAQ:QCOM | QCOM Price Prediction) stock slid 9% after the company issued a light forecast, leading chip stocks lower. A delayed quote at 11:33 AM ET showed Qualcomm down 11.93%.
How a 2x Fund Turns a Bad Day Into a Worse One
ProShares says USD seeks daily investment results. Before fees and expenses, those results aim to match two times (2x) the daily performance of the Dow Jones U.S. Semiconductors Index. On a day like today, that works against you.
The 2x target applies to a single day. The fund rebalances its exposure every day, a process called a daily reset. Each morning it starts over at 2x of whatever the fund is worth after the prior day’s gain or loss.
Much of the fund’s exposure comes through swaps. A swap is a contract with a bank. The bank pays the fund the index’s return, and the fund pays a financing cost in exchange. ProShares lists NVIDIA as the largest single stock in the fund, with an exposure weight of 24.65% as of November 4, 2026. When NVIDIA has a rough morning, this fund feels it hard.
Leverage costs money. ProShares lists the fund’s net expense ratio at 0.94%, which is well above what a plain index fund typically charges.
Losses Have Stacked Up Fast Since October
Today’s drop continues a steep slide. Measured through the same 11:29 AM ET price, USD is down 33.38% since October 28, 2026. Over one month, starting October 5, 2026, the fund has lost 46.57%.
For comparison, NVIDIA is down 22.16% over about the same one-month stretch, based on the delayed quote. A sector-wide pullback, magnified every single day, can erase nearly half a position’s value in weeks.
ProShares spells out the risk directly. In the fund’s words, “For any holding period other than a day, your return may be higher or lower than the Daily Target. These differences may be significant.” Over several weeks of daily resets, the math compounds. A choppy or falling market can leave the fund’s results far from a simple doubling of the index’s move over the same period.
What Today’s Drop Means for Your Money
A 2x fund is built for short holding periods. Traders use it to express a short-term view on chips, often for a day or a few days, and ProShares itself says results over longer stretches can differ significantly from 2x, in either direction.
For investors near retirement, the key issue is how much loss a position can take, and a plain semiconductor fund holding the same stocks would also be down today.
Several things could shape the next few sessions. Investors will be watching for any clarity on how the new Congress approaches AI regulation and data center policy (we covered seven suppliers behind the AI data-center expansion, from power to cooling, in a free report you can grab here). They’ll also be digesting Qualcomm’s forecast and watching whether the selling spreads further across chipmakers or eases. NVIDIA’s moves matter most here, given its weight in the fund.
Where USD ends the session matters, since the 15.72% decline reflects only the 11:29 AM ET price. A bad day for chips is, by design, a worse day for this fund, and the drop from $10,000 to $8,428 in a single morning shows how much is at stake when leverage runs in reverse.
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Ryne Mauck is an investment writer covering exchange-traded funds, retirement planning, and portfolio strategy. Through his work at 24/7 Wall St. and other investment platforms, including Seeking Alpha, he aims to provide clear, research-driven insights that help investors make more informed decisions while maintaining a long-term approach to investing.
Ryne holds a B.Sc. in Finance and an M.A. in Political Science. He is a formerly registered Municipal Advisor Representative and has passed the Series 50, Series 63, and Series 65 exams. His articles are not intended to be, nor should they be interpreted as, financial advice.
