Investing.com — The , often referred to as the market’s “fear gauge,” fell 5% on Tuesday, hitting four-week lows. This decrease reflects a significant reduction from the peak in December, when the index spiked 74% to $ 27.62 after the Federal Reserve announced a more conservative approach to its rate cut strategy.
The last drop of the VIX coincides with the inauguration of the new president of the United States, which happened yesterday. The administration has been considering a delay in tariffs that have been seen as potentially inflationary measures that could push interest rates higher. This political change seems to be injecting a sense of calm in the markets, leading to a decrease in the VIX as investors anticipate a less aggressive rate environment.
While the VIX is a measure of market volatility and not a stock, its movements are of concern to investors as an indicator of market sentiment and potential future volatility. The index is down nearly 50% from its December highs, suggesting a more stable market outlook as the new administration takes its first steps to set economic policy.
It is important to note that the VIX is a real-time market index that represents the market’s expectations for volatility over the next 30 days. Investors use the VIX to gauge the level of risk, fear or stress in the market when making investment decisions.
As the market adjusts to the new political landscape and its implications for trade and economic policies, the movements of the VIX will continue to be a key barometer of investor sentiment. However, it remains to be seen how the new administration’s policies will ultimately impact the economy and market volatility in the long run.
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2025-01-21 23:54:00
