- The conflict in the Middle East has shaken all financial markets, and participants are currently predicting increased turbulence.
- This is evidenced by the fact that the fear indicator on Wall Street has reached its highest level since the end of 2025.
The CBOE Volatility Index closed at 31,05 on March 27, up 13,16% in a single session and pushing the Wall Street fear gauge to its highest level since late 2025. Gold prices held near $4491 an ounce, while silver recovered to $69,82, helped by geopolitical tensions related to the conflict in the Middle East.
Volatility Index (VIX), calculated based on S&P 500 option prices, measures expected volatility over the next 30 days. A reading above 30 signals that traders are pricing in significant short-term turbulence. Friday’s close of 31,05 followed four consecutive weekly closes above 25, the longest such streak since 2022.
Options markets are seeing elevated open interest and asymmetry, reflecting demand for hedging against price declines ahead of April. VIX volatility index futures remain in contango, meaning traders expect volatility to persist rather than decline. Contracts for April 2026 reflect this caution.
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In recent days, Brent and WTI crude oil prices have fluctuated between $99 and $115 per barrel, down from previous peaks above $120. Shipping activity over the past few days indicates a noticeable decline in transit activity.
Rising energy prices are impacting transportation, manufacturing, and consumer prices. U.S. inflation data reflect rising prices, complicating the Federal Reserve’s future actions. Fewer interest rate cuts are currently priced into 2026, and the recent the report JPMorgan strategists are maintaining their base case scenario of just one cut of 0,25 percentage points by the end of the year.
JPMorgan describes its outlook as a «wait-and-see» approach and a «longer period of high rates.» This scenario should negatively impact the crypto market, as liquidity, flowing into risky assets, will be significantly reduced.
In March 2026, stock markets experienced several waves of sell-offs. The «flight to quality assets» pattern, with money flowing into Treasury bonds, gold, and their equivalents, mirrors previous periods of risk reduction, including tariff-related volatility in 2025.
If US-Iran negotiations progress or traffic in the Strait of Hormuz normalizes, volatility could decline sharply. If oil supply disruptions continue, growth forecasts for 2026 will be revised downward.
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