The recent downturn in the S&P 500, driven by a pullback in major tech stocks, has led to a surge in the VIX index, reflecting increased market volatility. This rise in the VIX, now at its highest level in over a week, indicates growing investor uncertainty as they reassess risk premiums amid shifting valuations and growth expectations. The decline in tech stocks has made price-to-earnings ratios more attractive, prompting analysts to revise earnings growth forecasts upward for the coming year. This environment of heightened volatility and reassessment of risk has contributed to increased activity in instruments like the VXX, which traders use to hedge against or speculate on short-term market volatility.
The iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX) experienced a rise, climbing 0.98% to $42.17 as of 12:40 PM on Monday, December 9.