Direxion Semiconductor Bull ETF Drops 60 Percent in July

The Direxion Daily Semiconductor Bull 3x ETF (SOXL) experienced a severe drawdown in July 2026, falling more than 60 percent in just over one month. This sharp reversal followed a period of extreme growth during the first half of 2026, where the fund saw a massive gain of 535 percent driven by the artificial intelligence trade.

The decline occurred as investors rotated out of technology stocks due to growing concerns regarding overspending on AI development. This shift left the tech sector as the worst-performing market sector for the month of July.

This volatility highlights the high risks associated with leveraged ETFs. Because these funds use derivatives to magnify daily exposure, they are designed for short-term trading rather than long-term holding, making them susceptible to rapid losses during market rotations.