The ProShares Ultra VIX Short-Term Futures ETF (UVXY) plummeted 6.97% on Thursday during the trading session, as investor anxiety surged following the Federal Reserve's hawkish policy stance.
In its December meeting, the Fed raised interest rates by 0.25% as expected but signaled fewer potential rate cuts in 2025 than markets had anticipated. This triggered a sell-off across equity markets, with the Dow Jones Industrial Average shedding 2.6%, the S&P 500 dropping 2.9%, and the tech-heavy Nasdaq 100 plunging 3.6%.
The heightened market volatility was reflected in the CBOE Volatility Index (VIX) spiking 58% to 25, its highest level since September 2022. As an ETF designed to track the short-term VIX futures contracts, UVXY was directly impacted by the surge in market turbulence following the Fed's hawkish messaging.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.