The Cboe Volatility Index (VIX) jumped to a three-month high of 18.46 yesterday as the Q2 earnings season began with lacklustre reports from Tesla and Alphabet, triggering a sell-off in the US stock market. The VIX, or the fear gauge, measures the demand for protection against stock fluctuations.
The S&P 500 dropped 2.3%, while the tech-heavy Nasdaq 100 fell 3.5% amid concerns about the sustainability of the year-long AI rally. The latest sell-off reflects the stock market's susceptibility to downturns in Big Tech as company stocks climbed higher to date on the AI hype despite extremely high valuations.
