Wall Street's traditional "fear gauge" might not be the best barometer for this selloff.

A new wave of turbulence swept up U.S. stocks on Tuesday as options traders grew more skittish about the year's big winners of the rally: megacap tech and artificial intelligence stocks.

Yet until Tuesday, signs of turbulence were fairly hard to spot by looking at the Cboe Volatility Index, or VIX VIX, which has been trading below its long-term average of just under 20.

Often referred to as Wall Street's "fear gauge," the VIX uses S&P 500 SPX options prices to gauge expected swings in the stock market over the next 30 days. The higher the VIX, the more anticipated the turbulence.

However, the Cboe Nasdaq Volatility Index, a gauge built on Nasdaq-100 options, has been sending a clear warning.

"We are seeing very peculiar activity from a volatility perspective," Mike Treacy, head of market risk at Apex Fintech Solutions, said on Tuesday. The better-known VIX has remained quite low relative to the "VXN" index, he said.

"What does that mean?" Treacy asked. "We are having tremendous volatility under the surface." But spotting it takes looking in the right place.

"I would say that this metric of volatility that has been used historically in the past - the VIX - right now, in this moment, is not the true measure," Treacy said.

Instead, he's focused on the VXN, which is tied to the 100 largest and most actively traded nonfinancial stocks in the tech-centric Nasdaq. It has gained attention elsewhere on Wall Street.

The VXN's sharp climb relative to the VIX has it nearing the highest level in two decades, according to Torsten Slok, chief economist at Apollo Global Management. His chart below shows the ratio of VXN over VIX climbing to about 1.64 as of June 16, the highest level since July 3, 2017, before easing toward 1.5 on Monday.

A reading above 1.0 means options markets expect bigger swings in the Nasdaq-100 than in the S&P 500. The higher the ratio, the more that expected turbulence is concentrated in tech. Within the past two decades, the ratio has been this high only in the mid-2000s, and during a 2017 spike, though it remains well short of dot-com extremes, when it topped 3 in 2000 and 2001, according to Dow Jones Market Data.

In other words, investors are paying up for protection against swings in the Nasdaq-100 even as broad-market volatility stays relatively contained. That points to a targeted worry rather than fears of a broad selloff, as nervousness has been concentrated in the market's most crowded and influential corners.

Importantly, implied volatility reflects expectations around the size of future swings and the costs of hedging, not the direction of prices.

"Dispersion is going to be the story of the year," said Treacy at Apex. While the past few years have been all about the "Magnificent Seven" companies, the rally in tech since has broadened to include second- and third-order beneficiaries for the AI spending boom, he said. "It was sort of frightening that we were so concentrated in those names," he said, adding that the current backdrop looks healthier.

Still, large-cap tech and AI names have driven much of the market's gains this year, lifted by enthusiasm for AI infrastructure, semiconductors and the platforms positioned to benefit from the next wave of computing demand. They now carry enough index weight that even a contained tech shakeout could leave a mark on the broader benchmarks.

That was evident on Tuesday when the iShares Semiconductor ETF SOXX was down 7%, but the S&P 500 was off 0.9% and the Nasdaq composite COMP was 1.3% lower, according to FactSet.