Market Volatility Drops To Record Lows Ahead Of Fed Decision; S&P 500 Settles Higher

The S&P 500 settled higher on Thursday amid a recovery in tech stocks, ahead of key inflation data and the Fed’s policy meeting next week.

Traders are now seeing around 73% chance that the Federal Reserve will maintain interest rates at its meeting on June 13-14. However, they see a 50% probability of a rate increase in July.

Shares of GameStop Corp. (NYSE: GME) dropped around 18% on Thursday as the company reported worse-than-expected results for its first quarter and named Ryan Cohen as executive chairman, terminating its former CEO.

Majority of the sectors on the S&P 500 closed on a positive note, with consumer discretionary and information technology stocks recording the biggest gains on Thursday. However, real estate and energy stocks closed lower during the session.

The Nasdaq 100 jumped 1.27% to close at 14,484.54 on Thursday, amid gains in shares of Amazon.com, Inc. (NASDAQ: AMZN) and Tesla Inc (NASDAQ: TSLA).

The S&P 500 rose 0.62%, while the Dow Jones rose 0.50% to 33,833.61 in the previous session.

The Chicago Board Options Exchange's CBOE Volatility Index (VIX) fell 2.1% to close at 13.65 on Thursday, dropping to a new post-pandemic record low.

What is CBOE Volatility Index?

The CBOE Volatility Index, popularly known as VIX, is a measure of the equity market's expectation of volatility based on S&P 500 index call and put options.

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