The recent tech selloff, driven by concerns surrounding DeepSeek, has led to an uptick in stock market volatility, as indicated by the VIX. Despite this, the VIX futures curve remains relatively calm, with contracts from February to June only rising by one to two points. This suggests that while there is immediate market uncertainty, investors maintain confidence in longer-term stability. The divergence between the VIX spot and futures is typical during risk-off periods, reflecting short-term fears but a belief in eventual market stabilization.
The VIX, which measures expected short-term volatility, is currently at 20.48 as of 08:42 on January 27, up from its last close of 14.85. This pre-market increase may be more reflective of liquidity issues and wider bid-offer spreads on S&P 500 options rather than a full-blown panic. Investors are drawing parallels to the late 90s dotcom bubble, noting that while the VIX spot has spiked, it remains far below the levels seen during past market downturns.