First time since 1996! The "Fear Index" is sending signals, will the calm period in the U.S. stock market come to an end?

The S&P 500 index and the VIX index rose for a rare 5 consecutive days, and the low volatility of US stocks may end early. This article is based on an article written by Golden Ten Data and compiled and contributed by Foresight News. (Synopsis: U.S. stocks plunged 3.5%, tech giants both fell more than 5%) (Background supplement: Nomura Securities: U.S. stock bull market is still supported by AI narrative, but risks cannot be ignored) After one of the quietest summers in years in the stock market, Wall Street's "panic index" soared again as investors feared that the trade impasse could escalate further. The Cboe Volatility Index (VIX), better known as the VIX or Wall Street's "Fear Index," traded as high as 22.76 on Tuesday, the highest intraday level since May 23, when the index traded as high as 25.53, according to Dow Jones market data. By the end of the market, the VIX had retreated significantly from its morning highs. The index closed above 20, a level that has some significance. Since the VIX index was established in the early 1990s, its long-term average has been slightly below 20. Therefore, investors tend to see this level as the line between the relative calm of the market and the beginning to appear somewhat panicked. The level of VIX is based on trading activity on options contracts that are pegged to the S&P 500 index and have an expiration date of about one month. It is seen as a measure of how worried traders are about a possible "dive" in the stock market. After all, volatility tends to rise faster when the market falls. Looking back, there are signs that investors are starting to feel a little too complacent. Throughout the summer, the stock market moved slowly higher with little interruption. According to FactSet data and MarketWatch calculations, this quiet trade eventually caused the S&P 500's three-month real volatility to fall last week to its lowest level since January 2020. Actual volatility is a calculation that measures how volatile a particular index or asset is over a recent period. VIX, which measures implied volatility, attempts to assess how volatile investors expect the market to be in the near future. The real volatility of the VIX and the S&P 500 went down at one point, but around Labor Day in the United States, the two began to diverge. According to portfolio managers who spoke to MarketWatch, this could mean several different situations. The first is that investors are increasingly inclined to use call options rather than actual stocks to bet on further stock market gains. If the S&P 500 rises above a predetermined level before a certain time, known as the expiration date, the call option will pay off. It could also mean that some traders are snapping up put options, which is like a kind of portfolio insurance. Fearing various risks of disruption following the record rally at the start of the year, some investors may prefer to hedge their downside risks while holding their stocks so as not to miss out on any further gains. Signs that the market may be preparing for the upcoming turmoil first appeared in late September. According to analysis by Ryan Detrick of Carson Group, between September 29 and October 3, the S&P 500 and VIX rose simultaneously for five consecutive trading days. This has not happened since 1996. Michael Kramer, a portfolio manager at Mott Capital Management, said seeing both the VIX and the S&P 500 move higher suggests that the lull in the market may soon be over. Mike Thompson, co-portfolio manager at Little Harbor Advisors, said: "The dry firewood that detonated [the market volatility] is already piled up there." Mott Capital's Kramer said, "You just need that spark to light it." While trade tensions are far from resolved, Thompson and his brother, Matt Thompson, also co-portfolio manager at Little Harbor Advisors, are watching closely for any signs that could signal a larger burst of volatility. Investors generally blamed the stock market sell-off on renewed escalation of trade tensions. In the Thompson brothers' view, Trump's tariff "dance" has begun to feel a little too familiar to pose a real concern. Investors seem to be mastering this pattern: one side fights for maximum leverage, first upgrade, then downgrade. In their view, a more plausible threat to market calm would be turmoil in credit markets. On Tuesday, JPMorgan CEO Dimon warned of potential more credit problems after the bank suffered losses for lending to bankrupt subprime auto lender Tricolor. After a prolonged period in which credit market conditions are relatively favorable, troubles in this area are likely to worsen. On Friday, BlackRock and other institutional investors demanded the withdrawal of funds from Point Bonita Capital, which is managed by investment bank Jefferies, after the bankruptcy of auto parts supplier First Brands Group caused significant losses to the fund. Matt Thompson said: "We are watching to see if another boot will fall." Related stories U.S. stock tokenization vs. token U.S. stocks, Nasdaq's technical path may disappoint you Tom Lee predicts that the "September curse" will be broken: Fed interest rate cut to help U.S. stocks rise, Ethereum is poised Ondo launches tokenized marketplace Global Markets: First launch of more than 100 U.S. stocks and ETFs on the chain, first landing on Ethereum (First since 1996! The "Fear Index" signals that the calm period for US stocks will end? This article was first published in BlockTempo's "Dynamic Trend - The Most Influential Blockchain News Media".