The escalation of tariffs by the United States, particularly targeting Colombia, has intensified fears of retaliatory actions, leading to increased volatility in financial markets. This has resulted in a depreciation of emerging market currencies, such as the Mexican and Colombian pesos, as investors brace for potential negative impacts on trade balances and economic growth. The uncertainty surrounding these tariffs has fostered a risk-off sentiment, prompting investors to seek safer assets amid concerns over inflationary pressures and disruptions to global supply chains. The VIX, often seen as a "fear gauge," has surged, reflecting heightened investor anxiety as global trade tensions rise.
The VS TR -1x Short VIX Futures ETF (SVIX) experienced a significant decline, dropping 8.53% to $24.78 at 13:40 on Monday, January 27.