The announcement of new tariffs set to commence 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 VIX, often referred to as the "fear gauge," as market participants seek protection against potential downturns. The rise in implied volatility and increased put selling reflect a growing demand for hedging against downside risks. Investors are reducing their equity exposure ahead of the weekend, wary of further negative developments related to geopolitical tensions, which has contributed to the VIX's upward movement.
The VS TR -1x Short VIX Futures ETF (SVIX) experienced a decline, dropping 2.66% to $25.58 as of 16:20 on Friday, January 31.