"The VIX closed last week at almost 27, an 11% jump on the final trading day, and early signals this week show it climbing further. The fear gauge now sits at its 93rd percentile over the past year, meaning volatility has been this elevated or higher only 7% of trading days in the last 12 months."
"The primary force behind this volatility surge is the active geopolitical conflict between the U.S.-Israeli alliance and Iran. West Texas Intermediate crude rose 2% back above $90 a barrel and Brent jumped back above $101 on Tuesday morning, as fighting continued despite initial hopes for a diplomatic off-ramp."
"Equity markets are already feeling the pressure, with the SPDR S&P 500 ETF Trust down nearly 4% year-to-date and off about 5% from its level a month ago. Small caps have absorbed the sharpest one-month hit at down 6%, which is typical when volatility spikes."
The VIX closed at nearly 27, reflecting an 11% increase, indicating high volatility. The primary driver is the geopolitical conflict involving the U.S., Israel, and Iran, causing oil prices to rise. The situation remains unresolved, affecting both energy and tech markets. Equity markets are under pressure, with the S&P 500 and Dow declining significantly. Smaller companies are particularly vulnerable during volatility spikes. Bonds are not providing the usual safe haven, complicating the market's response to these tensions.
Read at 24/7 Wall St.
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