MW Has the VIX peaked? 'Acute phase' of selloff in stocks may be done, says Bespoke.

By Christine Idzelis

Treasury Secretary Scott Bessent said in an interview this week that he thought the VIX has 'likely peaked'

Stock-market volatility has seen outsized swings up and down this month, as investors contend with uncertain negotiations around the "reciprocal" tariffs announced by White House on April 2.

"We think it's safe to say that the acute phase of the selloff is over," said Bespoke Investment Group, in a note after the U.S. stock market closed Tuesday. The firm cited a third straight day of declines for the Cboe Volatility Index - Wall Street's so-called fear gauge that trades under the ticker symbol VIX - and noted that it dipped below 30 during Tuesday's trading session.

The VIX VIX closed Tuesday at 30.12, falling 2.5%, according to FactSet data. That level is above the gauge's long-term average of around 20 but well below its surge last week.

As investors look for clarity on tariffs, U.S. Treasury Secretary Scott Bessent said in an interview Monday with Bloomberg Television that "the market can take great comfort" that the White House is going to "run a robust process." He pointed to the Cboe Volatility Index, suggesting that by that measure, the market may have seen peak uncertainty.

"If we measure uncertainty by the VIX," said Bessent, then "I think the VIX spiked and has likely peaked."

The VIX soared after President Donald Trump announced on April 2 sweeping tariffs that upset the global order of trade, with investors now watching for developments in negotiations between the White House and its trading partners. Investors had appeared unnerved by the large size and scope of the tariffs Trump rolled out. A big slump in U.S. stocks ensued amid fears that large levies imposed on goods imported from other countries risked causing a recession.

But equities bounced last week, after Trump announced a 90-day pause on "reciprocal" tariffs for countries outside China.

"It's been a wild ride in the markets, and nowhere have the extremes been more on display than in the CBOE Volatility Index," said Bespoke, in a separate note emailed Tuesday afternoon before the stock market closed.

"The VIX experienced its second-largest five-day increase on record last Tuesday," and then appeared "on pace for its second-largest five-day decline on record," Bespoke said. Based on the VIX at one point trading below 29 during Tuesday's session, Bespoke calculated the gauge had seen a five-day decline of 23.6 points, according to the firm's note.

Read: White House hints at some trade-deal progress - minus China. Here's how Trump is pressing Xi.

The U.S. stock market ended lower Tuesday, with the S&P 500 SPX declining 0.2%, the Dow Jones Industrial Average DJIA falling 0.4% and the technology-heavy Nasdaq Composite COMP slipping less than 0.1%, according to Dow Jones Market Data. All three indexes snapped back-to-back gains.

The S&P 500 is down more than 8% so far this year, with Big Tech stocks particularly hard hit, according to FactSet data. For example, shares of Tesla Inc. $(TSLA)$ have tumbled around 37% year to date, while Apple Inc. $(AAPL)$ has plunged around 19% this year through Tuesday.

Check out: Trump gave tech companies a break from tariffs. Here's how long that could last.

-Christine Idzelis

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April 15, 2025 19:40 ET (23:40 GMT)

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