Wall Street's fear gauge, the VIX, dropped sharply after US-China tariff agreement
From Yahoo Finance: 2025-05-14 21:40:00
The CBOE Volatility Index, or VIX, saw its quickest-ever decline in 21 days, dropping from above 40 to below 20. The recent US-China tariff agreement sparked optimism and a major stock rally. Despite concerns about tariffs resurfacing, experts believe the indicator reflects a positive outlook for stocks in 2025.
Historically, when the VIX has experienced a 20-point drop in under 100 days, the S&P 500 has traded higher over the next year. Wall Street forecasters have become more bullish on stocks, with Goldman Sachs and Ed Yardeni revising their year-end S&P 500 outlooks upwards. Goldman Sachs cited lower uncertainty and inflation expectations, while Yardeni cited higher growth expectations for the US economy.