The CBOE Volatility Index (VIX) experienced a significant surge of 20.54% to close at 17.90, reflecting increased market volatility and uncertainty. This rise in the VIX indicates a projected daily movement of approximately 1.12% in the S&P 500 over the next month. The market's sensitivity was influenced by mixed signals, including the introduction of DeepSeek, an AI solution aimed at reducing operational costs for tech companies, and geopolitical concerns such as potential US restrictions on Chinese technology. These factors contributed to the heightened volatility, as evidenced by the substantial trading volume in VIX options, particularly the VIX Mar 2025 20.000 call.
The ProShares Short VIX Short Term Futures ETF (SVXY) saw a decline, closing at $50.32, down 3.44% from the previous close of $52.11, and currently trading at $50.43 as of 16:40 on Monday, January 27.