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Stock market VIX index surged to highest level in history

Stock market volatility index VIX reached the highest level in history as Dow plunged almost 3,000 points

” A measure of implied volatility on Wall Street touched its highest level in history as all three stock benchmarks plunged by at least 12% Monday, marking one of the worst declines for equities in a generation, as fears about a long, hard slog with COVID-19, the infectious disease that originated in China last year, slammed assets considered risky. The CBOE Volatility Index jumped by about 44% in a single session, to close above 82, marking its highest finish in history, surpassing two readings of 80 that it registered during the 2008 financial crisis, if the index holds at that level. The index, also known as the VIX, for its ticker symbol, has become well known as Wall Street’s “fear gauge,” since it was created in the early 1990s. The VIX is a gauge of investor expectations for stock-market turbulence in the coming 30-day period, tracking S&P 500 index options contracts and had traded at a historic average between 19 and 20. Because the index often rises as stocks fall, it is viewed as a hedge against market turbulence. On Monday, turbulence was rampant as President Donald Trump issued new guidelines in dealing with the virus, including limiting gatherings to fewer than 10 people. He also said that the pandemic could be an issue for the U.S. into July, killing any hopes for a conclusion to the threat once the weather warms. The comments helped drag the Dow Jones Industrial Average down by 2,997.10 points, or 12.93%, to 20,188.52, the S&P 500 index dropped 11.98% to 2,386.13, while the Nasdaq Composite Index dropped 12.32% to 6,904, marking that technology-heavy index’s worst one-day fall in its history. For the S&P 500 it was their third worst day in its record and for the Dow, it was the second worst point decline in history. “

Source: https://finance.yahoo.com/m/b1a7ecc9-84cb-39bd-be21-2592f382dd5c/wall-street-s-fear-index-.html

CBOE Volatility Index (VIX) year-to-date chart
CBOE Volatility Index (VIX) year-to-date chart

Stock market data: Yahoo Finance

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