The stock market’s “fear gauge” – the CBOE VIX – spiked nearly 20% on Friday as a series of Trump tweets ignited Wall Street panic. | Source: Scott Olson / Getty Images / AFP
By CCN Markets: Friday was one of those days where headline news scared the heck out of investors, and the stock market’s “fear gauge” proves it.
The Cboe Volatility Index, or VIX, soared nearly 20%, peaking at 21.07 before settling down to 19.87 by the closing bell.
Fear started gripping investors early Friday morning when China retaliated against the U.S. by imposing its own set of new tariffs on American goods worth roughly $75 billion.
Investors were served another blow when Federal Reserve Chair Jay Powell stopped short of specifying any future interest rate cuts during his speech at Jackson Hole. Key points hit upon by the chair included:
- There is evidence of a global slowdown, and it’s worsened since the July Fed meeting.
- The outlook is deteriorating.
- The Fed will continue to watch developments carefully.
“Trade policy uncertainty seems to be playing a role in the global slowdown and in weak manufacturing and capital spending in the United States,” Powell said.
Trump appointed Powell in February 2018. He’s hounded him relentlessly over interest rates since Powell voted with fellow Fed members to hike rates in 2018.
The head-scratcher Trump tweets that left the stock market reeling
In tweets that left stock market investors and observers reeling, Trump went after Powell with attacks that seemed excessive –