Terraria (Wiki): Rainbow Rod

The Rainbow Rod is a Hardmode magic weapon that fires a white-sparkling projectile with a rainbow trail (desktop, console, mobile) / shifting rainbow light orb with a rainbow trail (3DS, old-gen consoles) in exchange for mana rather than ammunition. It is the upgraded version of Flamelash and Magic Missile. 

The Rainbow Rod fires a controllable exploding projectile if the Player holds the Use/Attack button and moves the cursor.  Mid-drag, releasing the Use / Attack button will launch the missile in that direction while the cursor moves along the angle created by the player if it is still when released. The missile will focus on any nearby present enemies, and will not vanish when touching a block while being manually controlled. The projectile is a fixed size, but when moving slowly, the trail effect may cause it to appear bigger or brighter. If the projectile is controlled and strikes a surface, it won't disappear. It will only blow up when it is beyond the player's control, this implies that the player does not have to be as exact when guiding the projectile through caves or small spaces out of concern for inadvertently destroying the projectile. The Rainbow Rod's mana cost is only for initial casting, and players will regenerate mana while in control, and it will not cost more mana to maintain and direct it.

When used, the Rainbow Rod emits light that cycles through the entire color spectrum, making it suitable for exploring caves, finding ores, and lighting dark places when traveling. It can move through liquids unlike the Flamelash, and reach speeds of 82 mph when used in lava or water. It can also pierce twice before exploding and inflicting damage in a condensed area and it is possible for the projectile to retarget an enemy after piercing it because of its sharp homing.

Combat-wise, the Rainbow Rod's high damage output, homing effect, and low use time make it effective when fighting waves of enemies and Hardmode bosses including Plantera and Golem.

The Rainbow Rod is best modified with Mythical for overall stats improvement.