The recent tech selloff, particularly concerns surrounding DeepSeek, has led to a significant increase in stock market volatility, as reflected by the VIX's sharp rise. Despite this spike, the VIX futures curve remains relatively stable, indicating that while there is immediate market uncertainty, investors are not overly concerned about long-term volatility. This divergence between the VIX spot and futures is common during periods of heightened risk, suggesting that the current market fears may be more about short-term liquidity issues rather than a broader market panic. The VIX's current level, while elevated, is still below the peaks seen in past market crises, drawing comparisons to the late 90s dotcom bubble.
The VS TR -1x Short VIX Futures ETF (SVIX) experienced a notable decline, dropping 8.71% to $24.73 at 9:00 AM on Monday, January 27.