Cboe Volatility index falls 10%, drops back below long-term average


The Cboe Volatility index tumbled on Wednesday, moving back below its long-term average as equities continued their recent rebound higher. The VIX
VIX, -14.13%
lost 10.3%, or 2.13 points, to 18.47, a decline that pushed it under the closely watched level of 20. The so-called "fear index" has seen sharp gyrations of late, as investors gauge the prospects of inflation returning to the equity market. Those concerns pushed major indexes into correction territory, a selloff that coincided with a spike in volatility. The VIX remains up more than 60% thus far this year, with more than half of that advance coming in the month of February. However, it has retreated sharply from a recent closing high of 38.8 hit earlier this month. The decline has come as stocks recover from their weakness, although they remain solidly below record highs reached late last month. The Dow Jones Industrial Average
DJIA, +0.49%
rose 0.6% on Wednesday while the S&P 500
SPX, +0.55%
was up 0.7% and the Nasdaq Composite Index
COMP, +0.86%
added 1%. The rise came as investors looked ahead to minutes from the Federal Reserve, which are scheduled to be released later in the day.