The CBOE Volatility Index, or more commonly referred to as the VIX, is the ‘fear-gauge.’

Generally, a rising VIX is associated with increased fear and uncertainty in the marketplace and falling stock prices, and vice versa for a declining VIX. The VIX is also used as a sentiment gauge.

Escalating tensions between Israel and Iran over the last couple of weeks failed to create much panic in the VIX. The fear gauge rose to only 22.75 at its peak last week despite brewing uncertainty over the degree of U.S. involvement in the conflict and whether oil supplies from the region would be disrupted. After the dust settled from U.S. airstrikes on Iranian nuclear facilities and Iran’s attempted (and telegraphed) retaliatory strike on a U.S. base in Qatar, an apparent ceasefire has been reached between Israel and Iran (although reports this morning suggest Iran may have breached the agreement).

The VIX has digested the news over the last week as a market-clearing event, suggesting peak geopolitical uncertainty from the conflict may be behind us. 

Source: LPL Research, Bloomberg 06/24/25

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