VIX falls below 200-day average to 17.52 before Fed decision

The Cboe Volatility Index (VIX) closed at 17.52 on Tuesday, October 27, 2026, down 4.73% and back below its 200-day moving average of about 18.23. The drop came as an AI-led chip rally and lower oil prices calmed US stocks before Wednesday's Federal Reserve decision.

Data as of the Cboe close, 20:15 UTC, October 27, 2026, unless stated otherwise. Closing levels are from Cboe via FRED and Yahoo Finance; moving averages are calculated from Yahoo Finance daily closes.

Key takeaways

• The VIX fell 0.87 points to 17.52, its second straight daily decline, according to Cboe data reported by Yahoo Finance and Ad-hoc News.
• The close put the VIX below its 200-day average (about 18.23) after three sessions above it, but still above its 50-day average (about 16.03).
• The index is 43.6% below its 52-week closing high of 31.05 from March 27, 2026, and 30.1% above its 52-week low of 13.47 from December 24, 2025, FRED data show.
• The October spike, which peaked at a 19.99 close on October 16, was driven by an AI and chip stock selloff, hotter inflation and an oil surge, according to CNN, CoinDesk and Reuters.
• The Fed decision on October 28, big-tech earnings, the September PCE inflation data and the November 3 midterms are the next tests for volatility.

VIX falls below its 200-day average: the trend in numbers

The VIX measures the 30-day volatility that traders expect in the S&P 500, based on index option prices. A falling VIX means investors are paying less for protection against large swings. Our guide to what the VIX is and how to read its levels explains the calculation.

The daily path shows a market that was calm for most of September and early October. The VIX closed at 14.84 on October 9, according to FRED. It then climbed to 16.87 on October 14 and jumped to 19.99 on October 16. After easing to 16.68 on October 21, it rose again to 19.03 on October 22 and 19.45 on October 23, before falling to 18.39 on Monday and 17.52 on Tuesday.

Analysis: the 200-day average sits higher than usual because it still includes the March stress, when the VIX closed above 30. Slipping back below that line shows the October scare has faded. The VIX remains above its 50-day average, however, which means expected volatility is still higher than in the quiet late-summer weeks. The 20-session gain of 9.23% tells the same story: the index has cooled from its peaks but has not returned to September levels.

Why the VIX rose in October

AI and chip selloff

The first spike came as chipmakers fell for an eighth straight day on October 16, their longest losing run since 2008, Yahoo Finance reported. A strong US inflation report added to worries that higher interest rates would make it more expensive for companies to fund AI investment, according to CNN. CoinDesk said the VIX "soared 22%" that day while the Nasdaq fell 2.15%, with AI-linked "neocloud" stocks and bonds under pressure.

The second wave came on October 22. The S&P 500 fell 1.21% and the Nasdaq Composite dropped 2.60% after earnings revived doubts about the AI spending race, Reuters reported. The Philadelphia semiconductor index lost 6.7%, and Meta fell 7.0% despite beating expectations, according to Reuters. "Investors are starting to realize that there are some holes in the AI story," Paul Nolte of Murphy & Sylvest told Reuters. We covered that session in Nasdaq falls on AI spending worries.

Oil, inflation and the Fed

Energy prices added pressure. CoinDesk reported that WTI crude rose above $101 a barrel on October 16 amid reports of an attack on Saudi Arabia's East-West pipeline, while the 10-year Treasury yield climbed to about 5.12%. On October 22, Houthi strikes on Saudi targets pushed crude to a five-month high and markets were pricing in a 25-basis-point Fed hike before year-end, according to Reuters.

UBS strategists said credit concerns in the AI sector had spilled into equity volatility, and described the October 16 move as "too technical to be sustainable," citing options positioning, Investing.com reported. UBS also said volatility risk premia may stay elevated through the October Fed meeting and the midterm elections.

Why the VIX fell this week

The reversal began on Monday, October 26, when the VIX fell 5.5% to 18.39 as the S&P 500 rose 0.7%, according to Zacks via Yahoo Finance. Zacks linked the rally to renewed enthusiasm for AI after Anthropic filed for a Nasdaq listing and Meta set out plans to raise $95 billion for AI infrastructure.

On Tuesday, the S&P 500 rose 0.60% to 7,722.60 and the Nasdaq gained 1.18%, Yahoo Finance data show. Chip stocks rallied after Broadcom said it helped arrange a $63 billion financing deal for Anthropic, Investopedia reported. Lower oil also eased inflation pressure as markets focused on Middle East peace talks, according to Reuters, as cited by Ad-hoc News. Our October 27 US stocks brief has the full session, and our report on Broadcom's $63 billion Anthropic chip financing explains the deal.

Key levels being watched

• About 18.2 (200-day average): the line the VIX has just crossed back below. It closed above it on October 22, 23 and 26, based on FRED closes.
• About 16.0 (50-day average): a close below it would put expected volatility back near late-summer levels.
• 19.99 (October 16 close): the highest close since July 29, according to market reports of that session.
• 20: the round number many strategists treat as the line between calm and cautious markets; the VIX's long-run average is about 19.6, according to a CFA Institute study of data since 1990.

What we know and what we don't know yet

What we know: the VIX closed at 17.52 on October 27, below its 200-day average and well under its March peak. The October spikes coincided with chip selloffs, hotter inflation and higher oil prices, according to Reuters, CNN and CoinDesk. The pullback this week came alongside an AI-led rally and lower crude.

What we don't know yet: whether the Fed will hold or raise rates on October 28, and how Fed Chair commentary will shift rate expectations. Alphabet and Microsoft report after Wednesday's close, and the September PCE inflation data is due on October 29 at 12:30 UTC. Reports on October 16 of traders being forced out of positions were not confirmed, CoinDesk noted. For the rate debate, see our explainer on the Fed's October meeting.

What it means

A VIX of 17.52 implies that options traders expect the S&P 500 to move about 5% up or down over the next 30 days (the annualised 17.52 divided by the square root of 12). That is calmer than mid-October but not as quiet as early autumn. The move below the 200-day average reflects relief after the AI and oil scares, yet the index has risen 9.23% over 20 sessions and sits above its 50-day average. With a Fed decision, major earnings, inflation data and the midterms all within a week, UBS's view that volatility premiums may stay elevated through these events is the key caveat to the calmer reading.

This article is for information only and is not investment advice.