The S&P 500 stumbled from record highs during Powell’s speech. Traders were expecting it.

Core Insights - The Cboe Volatility Index (VIX), known as Wall Street's "fear gauge," is rising, indicating increased expectations of market volatility [3][4][5] - The stock market recently reached record highs, with the Nasdaq Composite achieving its fourth consecutive record close [2][6] - The increase in the VIX is attributed to the Federal Reserve's recent meeting and the upcoming earnings reports from major tech companies [4][6] Market Performance - The Nasdaq Composite closed higher on Wednesday, marking its fourth record close in a row, while the Dow Jones Industrial Average fell by 74.37 points and the S&P 500 edged down by 0.30 points [2] - Despite the record highs, the VIX increased by 3% shortly after the market opened, reflecting traders' expectations of volatility [3][4] Volatility Indicators - The VIX measures expected volatility in the S&P 500 over the next 30 days, with a higher VIX indicating that traders anticipate greater market fluctuations [4] - The VIX spiked over 5% during Federal Reserve Chair Jerome Powell's speech, suggesting heightened market sensitivity to Fed communications [5] Earnings Impact - Anticipation of earnings reports from five out of the seven "Magnificent Seven" tech companies is contributing to the rising VIX, as these companies represent approximately 35% of the S&P 500 market capitalization [6] - The narrow nature of the recent market rally raises concerns, making the increase in the VIX a prudent response from investors [6]