The VIX index briefly fell below 15 this week, returning to levels seen before the escalation of the US-Iran conflict in late February, significantly below its long-term average of around 20. Meanwhile, oil prices remain near $90 and US Treasury yields are high, indicating that the stock market's pricing of macroeconomic risk is decoupling from that of the commodity and bond markets.
This is primarily due to a "dual-theme market": AI investment continues to support the technology and growth sectors, while energy companies benefit from high oil prices, with different sectors' gains and losses offsetting each other; individual stock volatility remains high, but the reduced correlation has lowered the overall volatility of the S&P 500. The VIX measures the index's expected volatility over the next 30 days and is not equivalent to the level of global risk.
