Wall Street Volatility Surges as VIX Tops 60 Again

Wall Street ended a volatile day mixed, with the VIX fear gauge spiking above 60 for just the second time since the pandemic, signalling heightened investor anxiety. Despite a 3% rebound in STOXX 600 futures, European stocks remain under pressure following Trump’s aggressive tariff threats, including potential 100%+ levies on China. Japan’s TOPIX rallied 6% amid signs of possible trade negotiations, while Taiwan and emerging Asian markets suffered sharp sell-offs due to higher US tariffs.

Equities

The FTSE 100 fell 4.4% on Monday to its lowest level in over a year, dragged down by concerns over US tariffs and weakening energy prices. Almost all FTSE 100 companies closed lower, with energy and pharmaceutical firms among the worst hit. Shell shares dropped 4.5% after the company cut its first-quarter LNG production forecast, citing adverse weather conditions in Australia. The broader FTSE 250 index was also down, losing 3.3% to reach its weakest level since November 2023.

AstraZeneca fell nearly 7%, weighing heavily on the pharmaceutical and biotech sector. The stock decline came despite no fresh company-specific announcements, though broader risk-off sentiment and defensive profit-taking may have contributed. Meanwhile, oil prices fell by more than 1% to a near four-year low, pushing UK energy companies down 4.8% overall. In currency markets, the pound weakened to a one-month low against the dollar, and gilt yields rose as traders increased bets that the Bank of England will cut rates in May. Market expectations for a rate cut moved from 50% last week to nearly 100% following the announcement of further US tariffs.

In the US, the S&P 500 slipped 0.23% to 5,062.25, and the Dow Jones fell 0.91% to 37,965.60, despite a brief intraday rally. The Nasdaq inched up 0.10% to 15,603.26. Apple dropped 3.7%, the S&P 500’s largest drag, while Tesla fell 2.6%. Both were hit by broader selling pressure across major tech stocks. On the upside, Nvidia rose over 3%, supported by continued demand for AI-linked technology, and Amazon gained 2.5%.

Real estate stocks led US sector declines, down 2.4%, while communications services rose 1% and technology added 0.3%. Trading volume surged, with nearly 30 billion shares changing hands across US exchanges, far above the 20-session average. The CBOE Volatility Index briefly breached 60 before closing at 46.98, its highest in five years.

Forex & Commodities

The yen and the Swiss franc held near six-month highs on, as investors turned to safe-haven currencies in response to heightened tariff tensions. The yen was last trading at 147.33 per US dollar, just shy of Friday’s peak at 144.82. The Swiss franc was at 0.8567 per dollar, close to Monday’s high. The US dollar index slipped 0.44% on the day and has now fallen more than 1% since President Trump’s tariff announcement last week.

The euro rose 0.58% to $1.0967 and remains near last week’s six-month high. The pound gained 0.4% to $1.2776, rebounding slightly from a one-month low on Monday. The Australian dollar added 1% to $0.6052, though it stayed close to a five-year low reached the previous session. The New Zealand dollar was also up 1% to $0.5606 ahead of a policy decision expected to bring a rate cut.

Gold recovered 0.5% to $2,996.60 an ounce, following a sharp selloff that brought prices to a near four-week low on Monday. US gold futures were up 1.3% to $3,010.70. Gold is still trading below its all-time high of $3,167.57, set on 3 April.

Oil prices rose around 1%, recovering slightly from Monday’s steep losses. Brent crude climbed 66 cents to $64.87 a barrel, while WTI rose 67 cents to $61.37. Both benchmarks had fallen 14–15% since the start of April. A Reuters poll showed that US crude inventories likely rose by 1.6 million barrels last week, ahead of official data due later this week.