CBOE VIX Volatility Index Futures (VIX) are trading 0.5% lower today, reaching levels last seen on February 27. The past two weeks have brought intense pressure on traders and institutions hedging against further volatility (fear) in the U.S. equity market. Today US500 and US100 are up almost 0.4%.
- The drop in VIX did not accelerated after Friday’s options and futures expiration (Triple Witching Day), however the drop from March 11 until now is almost 32% (26.5 to 17.88). Currently, demand for hedging—following the steepest equity declines in several quarters—appears to be fading, giving way to a bullish trend supported by narratives around easing U.S. trade tariffs, lower inflation data, and the Federal Reserve’s stance to begin scaling back Quantitative Tightening (QT) from August.
- U.S. stock indices have recovered part of their recent losses — the Nasdaq 100 is down about 3.5% year-to-date, while the S&P 500 has lost just under 1.8%. This rebound followed both benchmarks entering technical correction territory, having dropped nearly 10% from their highs. It seems that, at least until new concerns emerge, a further "VIX crush" is likely, and market momentum could lead to another "nonstandard" move lower in implied volatility — before any potential rebound in the index.
- A potential catalyst for renewed fear could be an escalation of tensions with Iran, which might trigger a spike in oil prices and worsen inflation expectations. Talks between Israeli and U.S. officials have begun today. The Israeli delegation reportedly does not believe economic sanctions alone will halt Tehran’s nuclear program and has persuaded former President Trump to set a two-month deadline for Iran to sign a nuclear agreement. After that (early May), military measures by the U.S. and Israel cannot be ruled out.
Of course, before then, we’ll also see more quarterly earnings reports from major U.S. companies.
Source: xStation5
Daily Summary: As a ceasefire drifts away, markets lose ground
US Open: Macro Up, Tensions Down!
Morning wrap: Wall Street gains amid hopes of renewed US–Iran talks🗽
US OPEN: Return of geopolitical concerns hits markets 💥
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.
