The Cboe Volatility Index (VIX) is a measure of the stock market’s expectation of near-term volatility, derived from the prices of S&P 500 index options. Often referred to as the “fear gauge,” it reflects investors’ sentiments about future market fluctuations.
A higher VIX value indicates greater anticipated volatility, suggesting increased investor concern, while a lower value implies expectations of stability. Historically, the VIX tends to rise during periods of market uncertainty or downturns, providing insights into market sentiment and potential turning points.
As of March 24, 2025, the VIX closed at 20.51, remaining above its 10-year and 20-year averages. This sustained level suggests ongoing market apprehension, influenced by factors such as trade policy uncertainties under the Trump administration.
Investors often monitor the VIX alongside other indicators to assess market sentiment and inform investment decisions. However, it’s important to note that while the VIX provides valuable insights into expected volatility, it should be considered as part of a broader analysis rather than in isolation.