Wall Street’s primary index gauging volatility in the market has reached its highest level since Covid-19 shuttered the entire global economy, suggesting catastrophic times are ahead in the not-too-distant future.
Global markets plunged Monday morning as selloffs among traders stoked fears that a recession is on the horizon. Nasdaq futures fell 5% one business day after last month’s jobs report showed a slowdown in hiring, coupled with remarks by Fed chairman Jerome Powell suggesting he would delay any rate cut until at least September. The selloff began in the early morning hours in Japan where the Nikkei 225 fell 12%, the greatest drop since the crash of Black Monday in 1987, according to the Wall Street Journal. Shortly thereafter, American markets punished its tech sector, with shares of Nvidia, Meta and Apple each losing 9% or more. Berkshire Hathaway announced it would begin unwinding its stake in the iPhone maker, adding insult to injury. The European STOXX 600 declined 2.6% at 487.15 points, its lowest since Feb. 13, the New York Post reported.
The CBOE Volatility Index (VIX), which tracks turbulence in American markets, has been the gold standard for gauging uncertainty during periods of financial unrest dating back to 2004. Using data from the past 30 days, the VIX computes what markets may do in the near future, giving traders a window into whether the floor will be filled with calm waters or a churning sea of waves. Unlike other stocks, VIX cannot be bought or sold directly, so instead traders must grab a stake through ETFs or other derivatives. The index stood at 65 on Monday morning, the highest since March of 2020 when it sat at 85.47, CNBC reported. […]
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