VIX soars to 4-month high as COVID-19 cases spur stock-market worry - Business Insider

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The stock market’s fear gauge is hitting fresh highs days ahead of the election as COVID-19 cases surge

, and as major US indexes saw sharp losses once again on Wednesday. The latest downturn was partially spurred by Germany and France's decision to announce new lockdown restrictions.

While record-high coronavirus case counts fuel concerns about the pace of economic recovery, prospects for timely fiscal support are all but exhausted. The Senate adjourned on Monday and isn't set to reconvene until Nov. 9, putting to bed any remaining hope for a stimulus bill. With the pace of recovery slowing, some fear new aid will arrive too late to keep the economy from tumbling again.

"It appears market participants have shifted toward a risk-off tone," Charlie Ripley, senior investment strategist for Allianz Asset Management, said in a Monday note. The week's uptick in volatility expectations also follows the historic trend of pre-election market jitters. Price swings have historically grown more amplified in the days heading into US presidential elections before calming through the rest of November. This year's election is particularly volatility-prone, as experts expect election outcomes to be delayed for days as mail-in ballots are tallied.

The VIX measures the market's expectation of volatility over the next 30 days through the pricing of S&P 500 options contracts. Investors watch the gauge to judge the level of risk or fear in the broad equities market. The index surged to a record high of 82.69 during the peak of the coronavirus sell-off in mid-March.

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