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Wall Street's fear barometer, the Cboe Volatility Index (VIX), surged above 50 points Monday, reflecting deepening investor anxiety following President Donald Trump's sweeping tariff measures.
Trump's announcement last week of the most expansive U.S. tariffs in over a century triggered sharp market declines. The downward trend extended into Monday as equity futures continued to fall, amplifying fears of a prolonged economic conflict.
The VIX a widely watched measure of short-term market volatility jumped as much as 20.4% during the session, hitting a high of 54.53. That follows a 51.43% surge on Friday and a 39.56% jump Thursday, marking one of the most turbulent stretches since early 2020.
Markets were already jittery after Beijing's response to the tariffs, which included a 34% levy on American imports. Now, traders are looking ahead nervously to see how other nations might respond. Analysts warn that a wave of retaliatory moves could raise the risk of even tougher U.S. tariffs, creating a spiral that fuels more selling.
Sentiment indicators are also flashing red. The CNN Fear & Greed Index has dropped into Extreme Fear, and concerns over weakening growth and a possible recession are building.
It's important to note that the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 Index, has underperformed its peers across all key timeframes. The ETF has fallen more than 12% over the past month, with six-month and one-year returns also in negative territory a reflection of continued pressure on large-cap U.S. equities.
This article first appeared on GuruFocus.