Wall Street posts three-week losing streak as Iran war batters sentiment
Monday felt like a classic volatility-dispersion session for the stock market, with a handful of mega-cap tech names driving the S&P 500 higher while the rest of the index struggled to gain any real traction. The equal-weight RSP ETF finished up just 24 bps, versus 50 bps for the SPX.
The spread between S&P 500 constituent volatility (VIXEQ) and the S&P 500 VIX index has widened to 23.1, putting it back near the upper end of its historical range. This measure typically peaks heading into earnings season.
The last time we saw levels like this was at the end of October, which was followed by the market decline in November. Before that, similarly elevated readings occurred in January 2025 and July 2024, both of which were also followed by sharp pullbacks in the S&P 500. Taken together, this pattern suggests a strong signal that another pullback could be developing once earnings season is behind us.
We have also seen weakness return in several private-equity names—such as Apollo (NYSE:APO), Blackstone (NYSE:BX), Ares, and Blue Owl (NYSE:OWL)—over the past few trading sessions, reversing much of the sharp gains they posted following the November sell-off. These stocks are worth watching because, in many ways, they may be reflecting the liquidity flows currently moving through the market. In addition, recent headlines around the group have turned somewhat more negative. Notably, these same stocks also led the decline we saw in October and November.
The SLV ETF implied volatility index (VXSLV) surged above 100 on Monday, briefly peaking near 120 intraday—an extremely elevated level that could be consistent with a peak in silver prices. The last time we saw readings this high was during the COVID lows for silver in March 2020.
This may be signalling a developing inflection point not just for silver, but for the broader metals complex, particularly given the sharp reversals seen on Monday in platinum and palladium, alongside silver.