CBOE VIX volatility index futures (VIX) are down nearly -0.7% today, extending strong downward momentum. The decline is being driven by several factors that make equities and risk assets appear attractive to investors despite historically high valuations.Today, futures on US indices such as US100, US500 gain 0.1 - 0.15% but US30 and US200 are almost 0.3% higher.
- The forward 12-month price-to-earnings ratio for S&P 500 companies stands at 22.1, versus the 5-year average of 19.9 and the 10-year average of 18.5. Now, investors are hoping that the Putin–Trump summit in Alaska will ease geopolitical tensions and perhaps trigger a sharper decline in energy commodity prices — especially if a peaceful resolution is truly reached in Ukraine and the U.S. eases sanctions on Russian resources, including oil. Such a scenario would reduce the inflation risk.
According to the Bank of America FMS survey, 78% of fund managers expect U.S. interest rate cuts within the next 12 months, while the probability of recession has dropped to its lowest since January 2025. Allocations to equities are also increasing. The survey sees the highest odds for the Fed chair position going to Waller, closely followed by Kevin Hassett. The biggest risks remain a trade war and higher inflation, which could prevent the Fed from cutting rates.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appVIX chart (H1 interval)
VIX futures are trading within a downward price channel, with potentially strong resistance likely to emerge around 17.3 (50-period exponential moving average – EMA50).
Source: xStation5
After each of the last two VIX rollovers, the index has returned to a strong downward trend, and expectations of U.S. rate cuts mean investors see little need to “hedge” volatility, despite potentially favorable seasonal patterns for the index in the coming weeks.
Source: xStation5
First, the U.S. earnings season has been very solid, with Big Tech companies reporting rising revenues and profits, easing concerns over “stretched valuations.According to FactSet, S&P 500 companies’ earnings rose by an average of 11.8%, and as many as 81% of firms reported both earnings and revenues above Wall Street forecasts. Forty companies issued positive guidance for the next quarter, compared with 38 that issued negative outlooks.
Source: FactSet
This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.
