The VIX or ‘fear’ index tracking S&P 500 volatility exploded 74% after Fed Chair Jerome Powell hinted at fewer rate cuts in 2025.
The S&P 500 fell nearly 3% on the day, with stocks across the board drowning in red. This was VIX’s biggest spike since 2018, even surpassing a 65% surge during the 5 August global market crash.
Everyone was just kicking back, expecting the markets to cruise smoothly on Santa’s sleigh through the year-end.
With inflation fears creeping back and Donald Trump’s tariff plans ready to slap markets left, right and center, uncertainty — the market’s worst enemy — might be making an epic comeback.
If that plays out, Wednesday’s decline might just be the opening act. We could see many more VIXplosions before 2025 sunsets.
