The ProShares Trust Ultra VIX Short Term Futures ETF (UVXY) is experiencing a surge in price due to heightened market volatility following President Trump's announcement of new tariffs on Mexico, Canada, and China. The tariffs, which include a 25% levy on imports from Mexico and Canada and a 10% levy on Chinese goods, have sparked fears of a trade war, leading to significant market uncertainty. This uncertainty is reflected in the spike of the Cboe Volatility Index (VIX), often referred to as Wall Street's "fear gauge," which has risen by over 20% as investors brace for potential economic disruptions and inflationary pressures. The tariffs have also led to a sell-off in global markets, with major indices such as the Dow Jones and S&P 500 experiencing significant declines.
The market's reaction to the tariffs has been swift, with futures for Wall Street's main indexes tumbling and the VIX spiking above 20. The increased volatility is attributed to concerns over the impact of the tariffs on global supply chains and economic growth, as well as potential retaliatory measures from affected countries. Additionally, the uncertainty surrounding future trade policies and the potential for further escalation have contributed to the heightened volatility. Analysts have noted that the market is likely to remain volatile as investors assess the long-term implications of the tariffs and any potential policy shifts.
The UVXY ETF rose to $21.43, marking a 10.66% increase from its previous close.