Good morning and welcome to the blog as we try and make sense of what has been a fairly wild night on the US markets.
The S&P 500 has traded in a range of morning than 200 points overnight, as Wall Street’s “fear index” shot up.
Having opened up a very healthy 1.4%, Wall Street’s benchmark stock index was more than 1.9% higher at its peak during the morning before commencing a long slide from the late morning (US time) that’s more than reversed those gains.
With about an hour left to trade the S&P 500 index is down 1% to 6,578 points.
With tech jitters again at the forefront, despite Nvidia’s better than expected results yesterday, the Nasdaq was off 1.4%.
In recent months, a common trade has been to “buy the dip” in big tech stocks related to AI. Overnight, that seemed to flip to a “sell the rally” trade, after those stocks bounced on Nvidia’s results.
One key index to watch is the VIX, an index linked to market volatility, also dubbed Wall Street’s “fear index”, which is above 25 and hit peaks of close to 28 overnight.
That’s around the highest levels seen since April this year, when President Trump’s trade war was still in its early stages and worries about an effective trade embargo between the world’s two biggest economies were high.
Locally, having got carried away with the Nvidia bounce yesterday, unsurprisingly the ASX SPI 200 futures are pointing towards a steep fall when the market opens here at 10:00am AEDT.
The ASX SPI 200 futures index is off 1.4% to 8,450 points.
Stay with me for what promises to be another rollercoaster for investors.
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