Wall Street’s “fear gauge” surges as Middle East escalation rattles stocks

The Cboe Volatility Index
VIX,
+16.06%,
better known as the Vix or Wall Street’s “fear gauge,” surged 20% on Friday to touch its highest level in more than a week, leaving it just shy of levels not seen since late May, according to FactSet data. The index touched an intraday high of 20.78, just shy of the Oct. 4 intraday high of 20.88. The move put the index briefly above its long-term average of 19.6. The Vix has remained relatively subdued since stocks started sinking in early 2022, only seeing a few brief spikes above its long-term average. The index reached its current 52-week high of 33.87 on Oct. 13 as stocks sold off following the release of a closely-watched inflation report, before the market staged a notable intraday rebound. Market strategists blamed geopolitical tensions tied to Israel’s escalating conflict with Hamas, as well as a U.S. plan to impose more sanctions on Russian oil sales, for rattling stocks as crude-oil prices jumped. The S&P 500
SPX,
-0.50%
traded as low as 4,311.97, down 1.1%, according to FactSet. It has since pared some of those losses, but remains on track to finish lower.