"Fear Index" signaled détente on Wall Street for the first time since the war began

The VIX Volatility Index, also known as the "Wall Street Fear Index," fell below 20 points for the first time since the U.S. war against Iran began. That's a level that, according to Investing.com grading, indicates "relative calm or complacency in the market."

In trading on April 8 - after the U.S. and Iran reached a two-week cease-fire agreement - the VIX fell nearly 23% at the moment to 19.91 points at its low. This may be seen by some market participants "as a sign of potential asset revaluation," Investing.com wrote.

Then the index, however, climbed back above 20, slowing the decline to about 20%.

At its peak after the start of the war in the Middle East, the "fear index" jumped to more than 30 points; it has not fallen below 20 points since the end of February. The VIX was at 31 on March 27, when U.S. President Donald Trump threatened Tehran with strikes on Iranian power plants. Such a "fear index" reading indicated "heightened uncertainty and fear in the market," Investing.com wrote, noting that historically such VIX levels have often been associated with corrections or recessions. In contrast, the VIX was last at its low - level 19 - before April 8, on Feb. 27 - the day before the war began.

Since the end of February and as of the close of the session on April 7, the S&P 500 has lost almost 4%. From its January peak values, the broad index of U.S. stocks fell by 5.79% over the same time. Brent crude oil in March showed a record growth in the history of observations, adding more than 60%.

However, amid reports of a truce between the US and Iran on April 8, Brent crude oil fell first below $100 and then below $91 per barrel. At the time of publication, June Brent futures are trading at $92.7. May contracts for WTI are at $94.2 per barrel.

This article was AI-translated and verified by a human editor