How Tariff Driven Volatility Ranks Over Time

Key Takeaways

• Inflation concerns, increasing recession risk, and, importantly, the uncertainty over tariff policy and the potential for retaliatory trade wars continue to weigh on – not only U.S. but global – markets. With uncertainty the only certainty this year, volatility continued to rise. Volatility thrives under uncertainty
• After a weekend announcement by President Trump that the aggressive tariff policy will remain, the VIX spiked, bouncing between the high 47 to low 49 range (and flirting with the 60 level to start the day).
• This is the 4th highest peak for the VIX since 2000. Markets have not seen the VIX in the high 40 level since early COVID, and the VIX has only been in the high 40s for an extended time during the Global Financial Crisis.
• It is rare for the VIX to cross the 40 mark. This occurred 190 times, or 3.0% of trading days since 2000. The majority of these days occurred during the Global Financial Crisis, followed by the start of COVID. So far in 2025, we have seen two days above this level. We will see what the rest of the year holds.

 

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Author

Katie Kolchin, CFA
Managing Director, Head of Research
SIFMA Insights

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