Wall Street Is Antsier Than It's Been All Year

The Cboe Volatility Index, aliases VIX, jumped to its highest level each twelvemonth connected Friday greeting aft a troubling jobs study exacerbated Wall Street’s fears astir a weakening economy.  

The U.S. added conscionable 114,000 jobs successful July, according to Labor Department information released connected Friday. The study besides showed nan unemployment complaint jumped to 4.3% from 4.1% successful June, triggering nan Sahm Rule recession indicator. 

The VIX, a measurement of expected marketplace volatility, subsequently leaped astir 10 points to arsenic precocious arsenic 28.25, its highest level since October 2022.

Concerns Economy Won't Have a Soft Landing

Volatility was already connected nan uptick earlier Friday’s ominous jobs report. The VIX, sometimes called nan “fear index,” hummed on beneath 15, a comparatively debased level indicating stability, from early May to mid-July. Simultaneously, nan S&P 500 steadily crept higher arsenic investors became progressively assured nan U.S. system was coming successful for a soft landing. 

But nan calm successful nan markets was disrupted successful mid-July erstwhile a soft ostentation study sparked a sell-off successful large tech stocks and rotation into small-caps. Volatility began to emergence amid nan rotation and has accelerated successful caller weeks aft immoderate disappointing tech net reports and, this week, signs of a weakening labour market.

Market Breadth Remains Intact

Analysts expect volatility to stay elevated arsenic economical and geopolitical uncertainty measurement connected markets. 

But heightened volatility doesn’t needfully mean stocks will fall.

“Fortunately, breadth remains coagulated pinch ~75.0% of nan S&P 500 trading supra its 200-DMA, providing longer-term investors pinch immoderate solace,” wrote John Lynch, Chief Investment Officer astatine Comerica Wealth Management, successful a statement Friday.