VIX Spikes 18% As S&P 500, Nasdaq Hit 6-Month Lows On Recession Fears: Retail’s Not Fully Convinced Of Bear Market Onslaught

Benchmark U.S. indices tumbled on Monday after President Donald Trump’s remarks about recession sparked fears of a slowdown in the world’s largest economy.

The S&P 500 fell over 2.7%, while the Nasdaq tumbled over 4% as investors digested the possibility of a recession, given the ongoing tariff wars with trading partners.

Notably, the CBOE VIX, which reflects investors' consensus view of future (30-day) expected stock market volatility, surged nearly 18% on Monday to hit 22.74 as of 2:00 p.m. ET, its highest level since August 2024.

The sell-off gathered pace after President Donald Trump did not explicitly rule out a full-blown recession this year in his interview with Fox News.

"I hate to predict things like that," he said, talking about recession in his interview with Fox News. "There is a period of transition because what we're doing is very big. We're bringing wealth back to America. That's a big thing… It takes a little time, but I think it should be great for us.”

Sam Stovall, chief investment strategist at CFRA Research, told CNBC that the market is experiencing a manufactured correction.

“Right now we’re going through a typical pullback and probably will experience a mild correction before all is completed, which actually would be good for the resetting of the dials of this ongoing bull market,” he said.

The iPath Series B S&P 500 VIX Short-Term Futures ETN ($VXX), which offers exposure to futures contracts of specified maturities on the VIX index, rose over 8%.

Similarly, the ProShares Trust - ProShares Ultra VIX Short-Term Futures ETF (UVXY) surged over 12% on Monday.

One user noted it’s a confirmed bear market now.

Another believes the VIX might cool off following Monday.

The S&P 500 is trading below its 200-day simple moving average (SMA) for the first time since November 2023.

Investors are awaiting the release of the CPI data on Wednesday to get more clarity on the Federal Reserve’s stance on rate reductions.

Also See: NY Fed’s Survey Shows Inflation Expectations Rose Marginally, Households Expressed Pessimism About Year-Ahead Financial Situations

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