Wall Street's fear index spikes as stock sell-off intensifies

By BEN SHIMKUS, US CONSUMER REPORTER

Published: | Updated:

Wall Street is having a rough Thursday. All three major indexes — the Dow, Nasdaq, and S&P 500 — have recorded steep losses by midday trading. Only one major index is in the green: the Volatility Index (VIX), otherwise known as the fear index. At 2pm EST, the index was up by nearly 20 percent.

Wall Street is having a rough Thursday. All three major indexes — the Dow, Nasdaq, and S&P 500 — have recorded steep losses by midday trading. Only one major index is in the green: the Volatility Index (VIX), otherwise known as the fear index. At 2pm EST, the index was up by nearly 20 percent.

The VIX measures how volatile investors expect the stock market to be over the next 30 days, based on options prices for the S&P 500. When the VIX jumps, it usually means investors are nervous — and when it drops, the market's feeling pretty chill.

The VIX measures how volatile investors expect the stock market to be over the next 30 days, based on options prices for the S&P 500. When the VIX jumps, it usually means investors are nervous — and when it drops, the market's feeling pretty chill.

Today, the index shows that Wall Street remains on pins and needles as questions about AI-driven gains creep into the market. Among the skeptics is Michael Burry , the Big Short investor who predicted the 2008 financial crash. Last week, it emerged he has now made a huge bet that Nvidia's share price will fall.

Today, the index shows that Wall Street remains on pins and needles as questions about AI-driven gains creep into the market. Among the skeptics is Michael Burry , the Big Short investor who predicted the 2008 financial crash. Last week, it emerged he has now made a huge bet that Nvidia's share price will fall.

Then, on Tuesday, Masayoshi Son, one of tech's most–watched investors , revealed he quietly sold off all his Nvidia shares and most of his stake in T-Mobile last month. Both moves were read as a warning sign that the AI boom — the same one that has powered record stock gains for companies including Nvidia, Microsoft, and Palantir — might finally be wobbling.

Then, on Tuesday, Masayoshi Son, one of tech's most–watched investors , revealed he quietly sold off all his Nvidia shares and most of his stake in T-Mobile last month. Both moves were read as a warning sign that the AI boom — the same one that has powered record stock gains for companies including Nvidia, Microsoft, and Palantir — might finally be wobbling.

Tech stocks have been hardest hit as jittery investors continued dumping the once-red-hot AI names, fearing their sky-high valuations have finally run out of steam. The Nasdaq, which started the week on a strong footing, was on track for a third straight day of losses — dragged down by giants like Nvidia, Broadcom, and Google-parent Alphabet.

Tech stocks have been hardest hit as jittery investors continued dumping the once-red-hot AI names, fearing their sky-high valuations have finally run out of steam. The Nasdaq, which started the week on a strong footing, was on track for a third straight day of losses — dragged down by giants like Nvidia, Broadcom, and Google-parent Alphabet.

But, not everyone is panicking about the tech rout. Some analysts say the slump is simply the market catching its breath after months of AI mania. 'It seems like a natural consolidation to me,' Ron Albahary, chief investment officer at Laird Norton Wealth Management, told CNBC , calling the pullback 'healthy.' 'At some point, all this capital expenditure is going to actually manifest itself.'

But, not everyone is panicking about the tech rout. Some analysts say the slump is simply the market catching its breath after months of AI mania. 'It seems like a natural consolidation to me,' Ron Albahary, chief investment officer at Laird Norton Wealth Management, told CNBC , calling the pullback 'healthy.' 'At some point, all this capital expenditure is going to actually manifest itself.'

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