On Wednesday, July 24, market volatility in the U.S. dropped significantly — the well-known VIX index hit its lowest level since February as strong labor data pushed stock indices to fresh highs.

The Cboe Volatility Index (VIX) — often called the “fear gauge” — dipped as low as 14.95 during the session before slightly recovering and closing near 15. This indicates that expected price swings in the S&P 500 are now at their lowest levels in five months.


🔹 Traders retreat from bets on market turmoil

Those who recently wagered on sharp market moves or stock collapses have been forced to rethink — or completely abandon — their positions. The realized volatility of the S&P 500 has dropped to just 6.9%, even lower than the implied volatility priced in by the market. That’s led to losses for short-term volatility speculators.


🔹 Low-volume trading poses a "liquidity vacuum" risk

Despite the calm, analysts warn this may be the quiet before the storm. August is historically a month when volatility rebounds — often due to reduced liquidity. With senior traders and fund managers on vacation, lower trading volumes can make markets vulnerable to sudden price swings even on minor news. Analysts have dubbed this a "liquidity vacuum", a summer risk Wall Street watches closely.


🔹 Gold, silver, and platinum under pressure

As markets rally and risk sentiment improves, investors have pulled out of traditional safe havens. Gold prices fell for a second session — spot gold dropped 0.5% to $3,370.69 per ounce. Other metals followed: silver fell 0.7%, palladium plunged 3.5%, and platinum dipped 0.5%.


🔹 Tech stocks drive gains, Dow Jones slips

While the S&P 500 rose 0.1% and the Nasdaq Composite added 0.3%, the Dow Jones fell 0.6% after IBM shares dropped 8% on disappointing software sales. However, Alphabet (Google’s parent company) delivered better-than-expected earnings, boosting tech optimism — its shares rose 1% after the Q2 results.

📉 Despite calm markets, August could quickly shift sentiment — especially if liquidity tightens further. Wall Street remains alert for signs that this "summer calm" may give way to sudden turbulence.


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