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VIX Index of US Stock Market Volatility Falls to Lowest Since January

VIX Index of US Stock Market Volatility Falls to Lowest Since January

Martin Essex, MSTA, Analyst

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.

Our trading forecasts for Q3 have been published; you can find them here.

And check out the IG Client Sentiment data to help you trade profitably.

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)

Latest VIX price chart.

Source: CBOE

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)

Latest S&P 500 price chart.

Chart by IG

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)

Latest S&P 500 price chart.

Source: STOXX

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--- Written by Martin Essex, Analyst and Editor

Feel free to contact me via the comments section below, via email at martin.essex@ig.com or on Twitter @MartinSEssex

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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