A measure of Wall Street volatility on Friday rose sharply, hitting its highest level in more than a year as equity benchmarks tumbled and as the 10-year Treasury notes extended its 5-day climb above 2.8%–its highest level in more than four years. The CBOE Volatility Index was up at 17.41, up 30%, a level that puts the volatility gauge at its loftiest level since Nov. 4, 2016, according to FactSet data. For the week, the so-called fear index was on track for a weekly rise of about 55%, which would represent its sharpest climb since Feb.5, 2016. The VIX uses bullish and bearish option bets on the S&P 500 index to reflect expected volatility over the coming 30 days, and it typically rises as stocks fall. However, the gauge, sometimes referred to as the fear index, has been abnormally low, trading below its historical average at around 20. A weeklong rise in 10-year Treasury note yield above 2.84% on Friday after an upbeat jobs report stoked fears of rate hikes and rising inflation, helped propel yields higher. Rising rates can undercut appetite for stocks if government paper offer richer yields than risk assets like stocks. The Dow Jones Industrial Average was down 550 points, or 2.1%, eyeing its worst weekly decline in two years, the S&P 500 index slumped 1.8% at 2,772, while the Nasdaq Composite Index are off 1.5% at 7,274. The rise in the VIX implies that volatility in otherwise subdued markets is beginning to make a comeback.
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