The so-called fear index flies 20% this Tuesday on Wall Street after Iran’s missile attack on Israel.
Iran launched a missile attack against Tel Aviv, Israel’s economic hub, an Iranian state media reported on Tuesday. The official IRNA news agency indicated that Iran launched “a missile attack against Tel Aviv”, without giving further details.
The CBOE volatility index or Vix jumped almost 20% to almost 20 points, its highest level in three weeks.
Meanwhile, the yield on benchmark Treasury bonds hit session lows.
In turn, The main Wall Street indices fell sharply, as investors became risk-averse after news of an escalation of geopolitical tensions in the Middle East, while evaluating data that pointed to a stable labor market.
The Dow Jones Industrial Average fell 0.6%; the S&P 500 lost 1.1%; and the Nasdaq Composite lost 1.9%.
Nine of the 11 S&P 500 sectors were down, although a 3% rally in crude oil prices helped a 1.5% gain in the energy sector. The Dow Jones index that tracks airlines fell 2%.
Meanwhile, the Labor Department’s Job Openings and Labor Turnover Survey, known as JOLTS, showed that job openings rose by 8.04 million in August, compared to estimates of 7.66 million, according to economists polled by Reuters.
On the other hand, the report from the Institute of Supply Management (ISM) showed that manufacturing activity stood at 47.2 points in September, compared to estimates of 47.5 points.
Traders rate the probability of a 25 basis point cut at the November Fed meeting at 64.6%, up from more than 60% before the data, according to CME Group’s FedWatch tool.
The three main Wall Street indices closed September on the rise, breaking a historical trend in which the performance of equities has been weak on average during the month.
Source: Ambito
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