From Yahoo Finance: 2025-04-12 03:06:00

In the last seven weeks, the stock market has experienced significant volatility, with the S&P 500, Dow Jones, and Nasdaq all falling by 15.6%, 18.9%, and 23.9% respectively since February 19. Concerns over President Donald Trump’s tariffs and historical high valuations have contributed to this crash.

The CBOE Volatility Index (VIX) accurately predicted the future with a 100% success rate over the last 35 years, providing insights into the stock market’s direction during periods of heightened volatility. Despite the recent crash, historical data suggests that buying quality stocks during times of panic can lead to significant long-term returns.

Following a two-day crash in the S&P 500 that saw a 10.5% decline, the VIX closed at 45.3 on April 4, signaling high investor fear and uncertainty in equities. However, historical data shows that the S&P 500 has been higher 100% of the time following similar VIX levels, with significant returns in the years that follow.

The S&P 500’s Shiller P/E ratio, a measure of valuation, closed at 30.74 on April 8, indicating that stocks are still historically pricey despite the recent crash. This high valuation, combined with concerns over tariffs and economic growth, suggests that further downside may be expected in the short-term.



Read more at Yahoo Finance: Wall Street’s Volatility Index (VIX) Has Done This 21 Times in the Last 35 Years — and It Has a Perfect Track Record of Forecasting Future Stock Moves