The recent surge in the VIX index, reaching its highest level in over a week, underscores the heightened market volatility as investors grapple with the downturn in the S&P 500. This volatility is primarily driven by a significant pullback in major tech stocks, which heavily influence the index due to their substantial weighting. Despite the decline, the market correction has made equities more attractive by improving price-to-earnings ratios, prompting analysts to revise earnings growth forecasts upward for the coming year. This reassessment of risk premiums and shifting valuations has contributed to the increased uncertainty reflected in the VIX's rise.
The ProShares Trust Ultra VIX Short Term Futures ETF (UVXY) experienced a rise, climbing 1.45% to $18.92 as of 12:40 PM on Monday, December 9.