Extreme Investor Network Blog: Volatility Hits Record Lows as S&P 500 Climbs
As of now, the S&P 500 has reached record highs with remarkably low volatility, leaving many investors wondering how long this trend will last. According to FactSet data compiled by CNBC, the index has gone an impressive 377 days without a 2.05% sell-off, the longest stretch since the great financial crisis.
This market calm has been fueled by investors flocking to megacap tech stocks like Nvidia, optimistic about the potential for artificial intelligence to drive profits. Year to date, the S&P 500 has seen a gain of over 14%. Expectations of Federal Reserve rate cuts have also boosted the market, as inflation edges closer to the central bank’s 2% target.
Adam Turnquist, chief technical strategist at LPL Financial, highlights how the shifting narrative from rate hikes to rate cuts and from recession fears to economic resilience has contributed to the decline in volatility. The VIX, considered the fear gauge on Wall Street, has hit multi-year lows, signaling a more stable market environment.
However, it’s important to note that low volatility periods like this may not last indefinitely. In 2017, the S&P 500 experienced minimal daily moves, with the VIX dropping to historic lows. But the following year, volatility returned with a vengeance, pushing the VIX above 50 before eventually subsiding.
With uncertainty looming over how long this low-volatility period will continue, it’s crucial for investors to stay informed and prepared for potential shifts in the market. Extreme Investor Network provides valuable insights and analysis to help investors navigate these fluctuations and make informed decisions. Stay tuned for more updates on market trends and investment opportunities on our platform.