Market Analysis by covering: S&P 500, CBOE Volatility Index. Read 's Market Analysis on Investing.com
The common perception among most traders and investors is that we live in increasingly uncertain times and that the markets are reacting with increased volatility and heightened event risk. Abnormal price swings due to unexpected news, whether it be economic, financial, or political, are said to be now more frequent than in previous years or administrations.
, and then calculate various volatilty metrics over time to determine this theory’s validity. Subjectively, we defined “historical data” as the period from 01/02/1996 – 12/31/2024 and “recent data” as the period from 01/02/2025 – 02/13/2026. First, the SPX. If the markets were truly more volatile in the recent 2025/2026 period, then one would expect increased negative moves and more extreme and longer lasting downward spikes. The results are below:As you can see, all three metrics do not display extraordinary volatilty when compared to the rest of the historical series. This is especially true in comparison to the dot.com, financial crisis, and pandemic periods.The VIX displays more evidence of increased volatilty in the most recent period, especially 2025, than did the SPX using similar metrics. In particular, the highest VIX reading of 2025, 52.33, was only exceeded during the height of the financial crisis and the pandemic. The number of spikes greater than 5 in 2025 also indicates heightened volatilty.of increased volatilty with actual conditions. Given the two time periods reviewed, volatilty in the most recent period is indeed higher, but only marginally so and not to the extent that it can be considered to be historically unique. In this case, many could be confusing uncertainty with volatilty. As you can see below, economic policy uncertainty has been at record highs since late-2024. However, that doesn’t necessarily mean that volatility is higher, just that overall conditions are more uncertain. The two should not be confused.There is an inherent risk involved with financial decisions. The information in this article is for informational purposes only and is not intended to provide financial advice. Views expressed are those of the author and are not necessarily those of the company.Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks. Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes.and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website. It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
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