One chart shows just how much investors are panicking over the trade war
The VIX, known as the stock market's fear gauge, has soared in recent days. Stocks crumbled again on Friday after the worst loss since 2020.
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- Investors are panic-stricken by Trump's newest tariffs.
- The stock market's volatility gauge spiked to its highest level in a year on Friday.
- Traders extended the sell-off Friday as the outlook for stocks continued to deteriorate.
Investors are panicking over Trump's latest tariff package.
Just look at Wall Street's fear gauge, which spiked to its highest level in about eight months as a global trade war kicked off this week. .
The Chicago Board Options Exchange's CBOE Volatility Index, or the VIX, spiked in the days before and following Trump's latest round of tariffs, which were more severe than most on Wall Street expected.
The VIX — which measures implied volatility based on S&P 500 index options — climbed above 40 on Friday as the chaos in markets continued. That's the highest reading since August of last year, when an unexpectedly weak unemployment report sparked fears of a recession and led to an unwind of the so-called yen carry trade, dragging global markets lower over the course of several days.
The VIX Index is up 116% since the start of this year.
Other signs of investor fear are beginning to bubble to the surface, despite Wall Street's upbeat outlook for stocks at the start of 2025.
A survey conducted by the American Association of Individual Investors ending on April 2 — the day Trump announced the reciprocal tariffs — showed 61.9% of investors are bearish on the stock market over the next six months. That's about double the average proportion of investors who say they feel bearish on the market.
According to Bank of America data published on Friday, US equities saw another $10 billion in outflows this week after the prior week's $21.3 billion. EPFR Global/Bank of America Global Research
Investors have been deeply shaken by the impact of Trump's trade war, with US stocks extending their losses on Friday as China hit back with reciprocal tariffs on the US and as Trump vowed that his policies would "never change in a post on Truth Social.
The major indexes tumbled for the second day in a row, with the S&P 500 down about 11% year-to-date.
