(Bloomberg) — The Cboe Volatility Index, or VIX, extended its decline Wednesday to close at its lowest level in more than three months as stocks climbed after minutes from the Federal Reserve’s most recent meeting signaled that investors could soon see a slowing in the pace of interest rate hikes.
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Wall Street’s fear gauge fell to 20.35. The last time it finished lower was Aug. 18, in the heat of the summer rally, when it was still trading under the key 20 threshold.
The VIX, which measures market expectations of 30-day volatility, can serve as an important indicator of how investors are feeling. That said, Wednesday was a light trading session before the US hunkers down for the Thanksgiving holiday, with volume on the S&P 500 down 35% from the average over the past 30 days. Traders will want to see if these levels hold next week.
(Updates moves throughout.)
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