Wall Street’s famous fear gauge is sending worrying messages to US stock bulls, betraying growing anxiety in the volatility market over rising tensions in the Middle East and ongoing turbulence in the bond world.
While the S&P 500 Index’s declines this week have appeared largely orderly, the nearest futures contracts tied to the Cboe Volatility Index — also known as the VIX and a measure of expected swings in America’s benchmark equity gauge — closed Thursday in a pattern known as backwardation. It’s a telltale sign of mounting distress, as traders anticipate more volatility in the near-term than further out in the future.