SK Hynix’s American depositary shares surged more than 24% Tuesday, climbing to fresh highs since the memory chipmaker’s Nasdaq debut, reversing much of the damage from Monday’s historic single-day plunge in Seoul. Here are five factors driving Tuesday’s dramatic rebound.

1. Newly launched leveraged ETFs amplified trading volume. The most immediate catalyst behind Tuesday’s sharp move was the debut of geared, single-stock exchange-traded funds tied directly to SK Hynix. GraniteShares launched both a 2x Long SK hynix Daily ETF, trading under the ticker SKUU, and a 2x Short version, SKDD, while ProShares introduced its own 2x long single-stock fund, ProShares Ultra SK hynix, trading as SKHU. The introduction of those geared products pulled in heavy trading volume that amplified underlying moves in the stock throughout the session. Analysts at 24/7 Wall St noted that follow-through in related memory names such as Micron, SanDisk and Western Digital would help confirm whether the broader rally reflected genuine sector rotation rather than a one-day squeeze tied specifically to the ETF launches.

2. Options trading began on U.S. exchanges for the first time. Tuesday also marked the first day options on SKHY shares became available to trade on U.S. exchanges, a development that drew significant speculative interest almost immediately. The most actively traded contract as of Tuesday afternoon was a $185 strike call option, with volume around 2,900 contracts, followed closely by a $145 strike put, while August calls with a $200 strike price also saw heavy interest, exceeding 1,500 contracts in volume. Daniel Kirsch, head of options at Piper Sandler, said the new market was likely to draw a wave of short-term speculative positioning. “Traders are expected to aggressively position for short-term trades betting on further gains in SK Hynix ADR this week,” Kirsch said, adding that demand for short-dated call options was expected to heat up further, with contracts expiring Friday potentially attracting a rapid influx of retail investors.

3. A cooler-than-expected U.S. inflation report lifted broader risk sentiment. Tuesday’s rally in SK Hynix unfolded against a backdrop of broader market strength following the release of June’s consumer price index, which came in well below Wall Street’s expectations. The softer inflation data helped ease bond yields and fueled a risk-on mood across technology and chip stocks generally, with the Nasdaq 100 rising roughly 1% on the day. That improving macro backdrop gave investors additional confidence to step back into AI-linked chip names like SK Hynix following Monday’s steep selloff, which had been driven in part by broader concerns about rising rates and geopolitical tensions tied to the ongoing conflict between the United States and Iran.

4. Comments from SoftBank’s CEO dismissed AI bubble concerns. On the same day, at the annual SoftBank World conference held in Tokyo, SoftBank CEO Masayoshi Son predicted that the artificial intelligence sector would require $5 trillion in annual investment by 2040 and flatly dismissed market concerns about an AI bubble. According to TradingKey, those comments significantly bolstered sentiment and helped support the afternoon rebound across Asia-Pacific chip stocks more broadly, including South Korea’s benchmark Kospi index, which staged its own V-shaped recovery Tuesday after Monday’s steep decline. Analysts noted that SK Hynix’s fundamental narrative, built around soaring demand for high-bandwidth memory chips used in AI accelerators, had not experienced any material reversal despite the stock’s wild price swings, with UBS reiterating a buy rating on the shares earlier in the month and raising its price target on the Korean-listed stock to 3.2 million won.

5. Monday’s selloff was widely viewed as technical rather than fundamental. Analysts covering the stock characterized Monday’s 15.4% plunge in Seoul, the company’s worst single-day decline on record, as reflecting profit-taking and liquidity dynamics following an overheated post-IPO rally rather than any genuine deterioration in SK Hynix’s underlying business. Research firm TradingKey wrote that “SK Hynix’s current decline stems more from technical corrections and liquidity shocks following excessive earlier gains, and the medium-term supply-demand dynamics of HBM have not undergone any directional shift,” referring to high-bandwidth memory, the specialized chip category central to SK Hynix’s role as a key supplier to Nvidia and other AI infrastructure customers. That framing appears to have encouraged buyers to view Monday’s drop as a buying opportunity rather than a signal of deteriorating fundamentals, contributing directly to Tuesday’s sharp rebound.

Tuesday’s volatility caps an extraordinary first week of trading for SK Hynix’s American depositary shares. The stock opened at $170 on its Friday, July 10, debut and closed its first session up nearly 13% at $168.01, part of a $26.5 billion offering that marked the largest-ever U.S. listing by a foreign company. Monday’s plunge, tied to the broader Kospi selloff that also dragged down Samsung Electronics and triggered a market-wide trading halt in Seoul, pulled the ADR down toward the $150 to $155 range before Tuesday’s rally erased much of that damage.

Analysts remain divided on whether Tuesday’s sharp bounce marks a durable recovery or another leg of the extreme volatility that has characterized the stock since its debut. A separate analysis from FX Leaders cautioned that a sustained rebound would require SKHY to reclaim and hold above prior resistance levels near $162 to $168 to fully restore confidence in the post-listing rally, noting that “until the ADR premium narrows or Q2 earnings confirm that expectations remain achievable, investors may continue treating rallies with caution.” That premium has itself become a talking point among market watchers, with Bloomberg reporting the gap between SK Hynix’s American depositary receipts and their Korean-listed shares had swelled to nearly 50% just three days after the stock’s U.S. debut, a spread some analysts attribute to the ADR’s comparatively thin trading float relative to the much larger pool of shares available in Seoul.

With SK Hynix’s formal second-quarter earnings report still pending and major cloud computing providers, including Microsoft, scheduled to report their own results later this month, analysts say the coming weeks should offer clearer signals on whether the underlying AI memory demand story justifies the stock’s current valuation, or whether Tuesday’s sharp rally simply represents another swing in what has already proven to be an unusually turbulent debut for one of the largest foreign listings in Wall Street history.