The announcement of new tariffs set to take effect on February 1 has injected a wave of uncertainty into the US equity markets, prompting a risk-off sentiment among investors. This has led to a notable increase in the Cboe Volatility Index (VIX), reflecting heightened market anxiety. The rise in implied volatility and increased put selling suggest a growing demand for downside risk hedging as traders brace for potential market declines. The broad market unease is further exacerbated by geopolitical tensions, leading investors to reduce their equity exposure ahead of the weekend.
The ProShares Trust Ultra VIX Short Term Futures ETF (UVXY) experienced a significant uptick, closing at $19.37, up 5.27% from the previous close of $18.40, as of 16:20 on Friday, January 31.