The Kobeissi Letter(@KobeissiLetter):Levered ETFs have become one of the most powerful forces in US equity markets: Daily rebalancing activity in US equity leveraged ETFs is up to a record $50 billion. Leveraged ETFs must rebalance daily to stay at their target leverage, adding more exposure after markets rise and reducing it after markets fall. This figure has more than QUADRUPLED since the start of 2026. Rebalancing activity now accounts for a record 1.60% of S&P 500 futures volume, exceeding the 2020-2024 peaks by 200%. To put it simply, leveraged ETFs have grown large enough that their daily rebalancing can now amplify market moves in both directions. Leveraged ETFs are amplifying market volatility like never before.

2026.07.02 22:00

Levered ETFs have become one of the most powerful forces in US equity markets: Daily rebalancing activity in US equity leveraged ETFs is up to a record $50 billion. Leveraged ETFs must rebalance daily to stay at their target leverage, adding more exposure after markets rise and reducing it after markets fall. This figure has more than QUADRUPLED since the start of 2026. Rebalancing activity now accounts for a record 1.60% of S&P 500 futures volume, exceeding the 2020-2024 peaks by 200%. To put it simply, leveraged ETFs have grown large enough that their daily rebalancing can now amplify market moves in both directions. Leveraged ETFs are amplifying market volatility like never before.

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