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Wall Street’s fear gauge surges the most since April. Why traders think it should be even higher
The VIX, Wall Street’s main measure of expected stock-market volatility, surged on Thursday as the S&P 500 fell sharply. The move suggests traders were caught off guard, and some argue the volatility gauge should have risen further given the scale of the market’s decline.
The VIX climbed as much as 5.7 points to above 28, its highest level since 31 March, and moved more than 11 points from its intraday low to high, the biggest daily move since 9 April. The S&P 500 was down 3% and heading for its steepest fall since April 2025. A common rule of thumb links each 16 VIX points to a 1% move in the S&P 500.
In short
- VIX rose above 28, its highest since March.
- Its intraday swing was the largest since April.
- Traders say the market’s fall may warrant even more volatility.
Explained simply
The VIX is an index based on prices for options linked to the S&P 500, a broad measure of large US companies’ share prices. It reflects how much movement traders expect in the market over roughly the next month; a higher reading generally means greater expected volatility, or sharper price swings.
Traders use the VIX to gauge uncertainty and to help price protection against market falls. It does not predict whether shares will rise or fall, and rules of thumb comparing VIX points with S&P 500 moves are only rough guides. When share prices drop sharply, the VIX often rises, but the size of that rise can vary.