Stock Market Roundup- Fear Gauge Climbed 5.5%
Stocks moved little on Wednesday overall and then experienced pullback on Thursday as the fear index rose.
Quick overview
- U.S. stock futures were mostly flat, with energy stocks providing a slight boost amid rising volatility indicated by a 5.5% increase in the fear index.
- The Dow closed down 0.6%, while the Nasdaq and S&P 500 remained nearly unchanged, reflecting mixed performance in the market.
- Crude oil prices rose, benefiting energy stocks like Shell and Chevron, but overall market sentiment remains cautious due to the rising VIX.
- Early trading on Thursday showed negative movement, with semiconductor stocks like AMD and Micron Technology experiencing losses.
U.S. stock futures were mostly flat for Wednesday as the session closed off, but energy stocks offered a lone bright spot while the fear index rose 5.5%.
Stock indices were mixed Wednesday at the close of trading, with the Dow down 0.6% and the Nasdaq and S&P 500 remaining practically flat. A few energy stocks propped up the market, and the CBOE Volatility Index (VIX), the market’s fear gauge, moved up 5.5%, indicating increased volatility and greater hesitation from investors to engage with the market.
Crude oil prices rose, helping energy stocks look healthy after some steep decline in the previous session. Brent crude oil is up 6.85% over the last five days, and the benchmark West Texas Intermediate added 8.4% in the same period, making back some of the losses from the previous week.
Volatility Fears Push Fear Index Higher
Even though a few energy stocks performed well on Wednesday, the indices either stalled or fell for the day. Shell (SHELL) added 1.80% for Wednesday, and Chevron (CVX) gained 0.57%. Enbridge (ENB) was one of the big energy winners for the day, with gains of 3.74% as the Canadian powerhouse continued its long history of consecutive stock increases. For the past 30 months, this stock has climbed.
But the VIX fear gauge tells a story about a market that is in a fragile place. Even with the S&P 500 and Nasdaq near all-time highs, they are not remaining bullish from day to day. News that the VIX is rising could suppress trade and keep investors from making bold moves or risky ventures. The higher that gauge moves, the less likely the market is to see quick upswings and strong surges from even the most reliable stocks.
The fear gauge rose to 18.8, and total traded shares were down by 7.8% compared to the average of the last 20 days. The overall number of decliners far outweighed advancers on the stock indices, pointing toward sluggish trading and perhaps even the start of a bear trend.
Thursday market movement for early hour trading is fairly negative so far. Advanced Micro Devices (AMD), which surged on Wednesday, pulled back early Thursday with a loss of 1.48%. Micron Technology (MU) fell as well, losing 1.59% as semiconductor stocks felt the weight of market correction. Energy stocks may pull back as well throughout the day, since oil prices started falling early Thursday.
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