Volatility Gauge Vix Surges To An 8-Month High: 'More Fear Equals More Opportunity,' Says Analyst

The CBOE VIX, which is also known as the volatility index or the fear gauge, zoomed 39.56% to close at 30.02 on Thursday following the tariffs imposed by President Donald Trump.

What Happened: According to Charlie Bilello, the chief market strategist at Creative Planning, the VIX index closed at its highest level since Aug. 5, 2024.

“Fear is on the rise and stocks are on sale, providing more opportunities for long-term investors,” he said.

Bilello also highlighted the historical data and said that the S&P 500 has given “higher than average” returns after the biggest volatility spikes in the past.

The data shared by him shows that after a similar spike on Aug. 5, 2024, the S&P 500 index returned 6% over one month, 11% over three months, and 18% over the next six months.

On average, the S&P 5000 index has gained 12%, six months after such volatility spikes and 21% after a year.

“More Fear = More Opportunity,” said Bilello in an X post.

See Also: Wall Street Worries Mount As Bearish Sentiment Hits Highest Level Since 2009 Amid Trump’s Tariffs

Why It Matters: The benchmark indices have slipped into the correction zone as they have plunged below 10% from their previous highs.

The S&P 500 index was down 12.22% from its record high of 6,147.43 points, scaled on Feb. 19. Whereas, the Nasdaq 100 was 16.65% lower from its 52-week high of 22,222.61 points, essentially getting closer to the bear market territory of -20%.

The Dow Jones Industrial Average, on the other hand, was 10.05% lower than its previous high of 45,073.63 points, as of Thursday.

The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, slumped in trade on Thursday. The SPY was down 4.93% to $536.70, while the QQQ declined 5.35% to $450.66, according to Benzinga Pro data.

On Friday, the futures of the Dow Jones index dropped 0.32%, whereas the S&P 500 and Nasdaq 100 indices also declined by 0.27% and 0.23%, respectively.

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