VIX Index of US Stock Market Volatility Falls to Lowest Since January
VIX price, news and analysis:
- The US stock market volatility index has dropped to its lowest since January 16.
- The fall in the markets’ ‘fear gauge’ suggests that no major market disruptions are expected.
- European stock market volatility has fallen too.
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VIX index falls
The VIX index, which measures US stock market volatility by looking at S&P 500 put and call options, dropped to a low of just 10.52 Tuesday, down from a peak of 50.30 in early February and at its lowest level since January 16.
Known as the markets’ fear gauge, the fall in the VIX suggests that investor sentiment towards US stocks remains positive – despite trade war fears – after a string of strong US corporate earnings reports.
VIX Price Chart, Daily Timeframe (Year to Date)
The fall in the VIX comes at a time when US stocks are trending higher; moving closer to the peaks reached in January.
S&P 500 Price Chart, Daily Timeframe (Year to Date)
European stock market volatility falls too
It is a similar story in Europe, where the VSTOXX index has been dropping steadily. That is based on EURO STOXX 50 options prices and implies that investor confidence in European stocks remains positive too, even though European stock prices are still well below the peaks reached in January and May.
VSTOXX Price Chart, Daily Timeframe (Year to Date)
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--- Written by Martin Essex, Analyst and Editor
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.