Geopolitical tensions, particularly the ongoing US-China trade review, have contributed to a decrease in market volatility, as reflected by the CBOE Volatility Index (VIX) closing down 1.13% at 14.85. This decline suggests a slight reduction in expected market movement, with less than 1% daily shifts anticipated for the S&P 500 over the next month. The technology sector, sensitive to these geopolitical developments, has been notably impacted, adding to investor caution. Despite the reduced volatility, significant trading activity was observed in VIX options, particularly the VIX Feb 2025 15.000 put, indicating that investors are still hedging against potential market shifts.
The iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX) closed at $41.74, down 0.45% from the previous day's close of $41.93, and currently stands at $41.82, reflecting a slight post-market increase of 0.19% as of 16:40 on Friday, January 24.