In early 2026, the energy sector has reclaimed its title as one of — if not the — most volatile corners when it comes to the equities market. As Direxion CEO Doug Yones would say, heavy volatility makes for “perfect Direxion weather.
Conflict in Iran is spooking global markets, sending oil prices higher. Some geopolitical experts and professional investors are speculating that prolonged conflict there or a traditional boots-on-the-ground military campaign could send crude price soaring to $150 per barrel.
Rising U.S.-Iran tensions and limited OPEC+ supply hikes may lift oil prices, putting leveraged energy ETFs like ERX, GUSH, DIG and OILU in focus.
Electricity demand is expected to reach peak levels in 2026 and beyond thanks to artificial intelligence (AI). This could make nuclear energy a more viable choice globally.
Direxion Daily Energy Bull 2X Shares is a leveraged ETF best suited for short-term trading, not long-term investing, due to time decay and amplified volatility. Oil prices have been steady in mid-2025, with strong product demand and supportive U.S. energy policies benefiting oil companies' earnings. XLE, the underlying index for ERX, has outperformed crude oil prices, and ERX magnifies both gains and losses relative to XLE.
President Trump's One Big Beautiful Bill could energize leveraged ETFs that can capitalize on the strength of the oil and gas industry. That is, of course, if they continue exhibiting upside through the rest of the summer.