The market's cautious optimism, reflected in the S&P 500's modest gain, has contributed to a slight reduction in volatility expectations, as indicated by the CBOE Volatility Index's (VIX) decrease. Despite concerns over rising bond yields and the implications of the latest nonfarm payrolls report, the VIX fluctuated between a high of 19.50 and a low of 17.37, closing at 17.70. This suggests that while investors are maintaining a watchful eye on potential economic shifts and Federal Reserve policy changes, the immediate outlook for market volatility remains subdued. The significant trade volume in VIX call options hints at some anticipation of future volatility, yet the current environment reflects a complex mix of cautious optimism and underlying concerns.
The iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX) experienced a slight decline, closing at $46.34, down 0.15% from the previous close of $46.41, and currently trading at $46.37 as of 4:40 PM on Wednesday, January 8.