VIX and Global Volatility Indices Signal ‘Super Calm’ Before the Fed

As the trading week closed on Friday, 5 December 2025, global volatility gauges – led by the Cboe Volatility Index (VIX) – were flashing an unusually quiet message. Wall Street’s “fear gauge” has slipped back into the mid‑teens, even after a year that included multiple panic spikes above 20 and an outright shock move to around 60 in April. ^[1]

At the same time, world equity benchmarks are hovering near record territory, and bond‑market volatility has slumped to its lowest levels since the early 2020s. ^[2] With a crucial Federal Reserve rate decision coming on 10 December, the picture from 5–7 December is clear: risk assets are calm, but central‑bank uncertainty is still lurking just under the surface.

VIX Today: Fear Gauge Drifts Back to Mid‑Teens

Spot levels into the 7 December weekend

Data from Investing.com show the S&P 500 VIX index at 15.41 as of the latest close, down about 2.3% on the day. ^[3]

A separate daily wrap from Yahoo Finance notes that on Thursday the VIX fell around 1.9% to 15.78, as Wall Street digested mixed economic data but remained optimistic about an imminent Fed rate cut. ^[4]

Charles Schwab’s intraday “Market Open” update on Friday morning cited the VIX around 16.06 at 8:47 a.m. ET – still a historically subdued reading – alongside modest moves in the S&P 500 and 10‑year Treasury yields. ^[5]

Taken together, the end‑of‑week picture is:

Spot VIX: mid‑teens (around 15–16)
Direction: drifting lower over the past few sessions
Context: U.S. major indices trading just shy of all‑time highs, with volatility compressing despite upcoming macro catalysts. ^[6]

How calm is “calm”?

To understand just how quiet this is, it helps to look back:

In April 2025, amid tariff turmoil and a global equity rout, Reuters reported the VIX spiking to around 60, its highest level since a previous major selloff, while Europe’s VSTOXX saw its biggest jump since the global financial crisis. ^[7]
In late November, a separate bout of risk aversion linked to AI‑stock valuations pushed the VIX back above 20, with one high‑profile Fortune piece describing it peaking in the high‑20s before easing. ^[8]

Against that backdrop, a mid‑teens VIX is not just “normal” – it’s low. Bloomberg summed up the current mood bluntly on 5 December: the VIX is hovering near year‑to‑date lows, while bond‑market volatility (tracked by the MOVE index) has dropped to its quietest levels since early 2021. ^[9]

World Volatility Indices: Calm Almost Everywhere

“VIX World Indices” isn’t a formal asset class, but traders routinely compare Wall Street’s fear gauge with similar measures around the globe. As of 5 December 2025, most of them are telling the same story: suppressed volatility with pockets of regional nuance.

Europe: VSTOXX stays higher than VIX, but not by much

The EURO STOXX 50 Volatility Index (VSTOXX) is Europe’s main equity volatility gauge, derived from options on the EURO STOXX 50, much like the VIX is built from S&P 500 options. ^[10]

Recent data compiled on Investing.com and related volatility dashboards show:

VSTOXX around 20–21 with a daily gain of roughly 5%, leaving it above U.S. VIX levels but still far from crisis territory. ^[11]

That gap – Europe in the low‑20s vs. the U.S. in the mid‑teens – is consistent with longer‑term ECB analysis, which often finds the VSTOXX somewhat elevated relative to the VIX during periods of macro uncertainty in the euro area. ^[12]

India: India VIX drops to near‑cycle lows

India’s equivalent, the India VIX, derived from NIFTY options, has slid sharply in early December:

Investing.com’s historical table shows India VIX closing at 10.315 on 5 December, a 4.65% drop on the day and near the low end of its 52‑week range (roughly 9.4–23.2). ^[13]
Local market coverage from Business Standard notes that India VIX fell about 2.9% to around 10.5, reinforcing a bullish undertone for the Nifty as it climbed above 26,150. ^[14]
A pre‑open commentary highlighted the index’s volatility gauge dropping to about 10.8, its lowest reading since October, signalling reduced nervousness and increased risk‑taking appetite among traders. ^[15]

In other words: Indian equity volatility is even calmer than the U.S., reflecting strong local risk appetite and supportive policy moves, including a recent RBI rate cut.

Japan: Bond‑market VIX also subdued

Japan’s standout volatility barometer isn’t an equity index but the S&P/JPX JGB VIX, which measures 30‑day implied volatility on 10‑year Japanese government bond futures. ^[16]

S&P Dow Jones Indices data show the S&P/JPX JGB VIX at about 4.16 on 5 December, up slightly on the day but still low in absolute terms. ^[17]

That’s striking given that Japanese yields have been edging higher and markets are actively debating a possible Bank of Japan rate hike this month, as highlighted in recent Reuters coverage of the Nikkei’s pullback and the surge in JGB yields to 2007‑era highs. ^[18]

Low implied volatility in JGBs despite BOJ uncertainty underscores how complacent fixed‑income markets have become globally, dovetailing with the slump in the U.S. MOVE index.

Cross‑asset volatility: MOVE, gold and oil

Across asset classes, the message is similarly calm:

MOVE Index (U.S. Treasuries) – Bloomberg and multiple derivatives platforms report the MOVE at its lowest level since early 2021, even as 10‑year yields hover near 4.1%. ^[19]
Gold and oil volatility – FRED and options‑based gold (GVZ) and oil (OVX) indices show volatility at moderate, not extreme, levels, consistent with the relatively stable pricing of gold near all‑time highs and oil in the low‑60‑dollar range. ^[20]

Overall, volatility is low in U.S. stocks, European stocks, Indian stocks and major bond markets – all at once. That kind of synchronized calm is rare.

Why Is Volatility So Low Right Now?

Fed cut is “priced in”

The main narrative tying together VIX and global indices between 5 and 7 December is the near‑unanimous expectation of a Federal Reserve rate cut next week.

Reuters’ global markets wrap on 4 December reported that futures markets price around a 90% chance of a 25‑basis‑point cut at the 10 December meeting, after a softening in U.S. labor data and steady services activity. ^[21]
The follow‑up “Wall St Week Ahead” piece notes that markets currently assign about an 84% probability to the cut, even as at least five of the twelve FOMC voters have publicly questioned further easing. ^[22]

When markets agree on the outcome, implied volatility tends to compress. Many investors are effectively betting on a “Goldilocks” scenario: slower but stable growth, inflation drifting toward target and a Fed that will cut rates but promise to remain data‑dependent.

Equity indices near highs soothe nerves

On the price side, the backdrop is bullish:

Reuters reports global shares higher on 4 December, with the MSCI All‑Country World Index up about 0.24%, the STOXX 600 gaining 0.45% and Japan’s Nikkei jumping over 2%. ^[23]
Yahoo Finance and AP market reports show the S&P 500, Dow and Nasdaq all trading near record territory as of Friday, with only minor pullbacks despite occasional wobbles in big‑tech names. ^[24]
Regional markets are following suit: UAE exchanges logged some of their best weeks since mid‑year, rising 2–2.5% as investors there also positioned for Fed cuts. ^[25]

Rising indices tend to reduce demand for hedging, which pushes volatility indices lower. This is especially true late in the year, when many funds are reluctant to pay for protection that could drag on performance metrics.

“Super calm” positioning and the unwinding of tail‑risk hedges

Several analyses published on 5–6 December go a step further, arguing we’re not just calm, we’re “super calm”:

A widely shared note reposted by Futu and Longbridge describes U.S. markets as experiencing a rare moment of tranquillity, with the VIX near its yearly low, the MOVE at its lowest since early 2021 and large tail‑risk hedges being unwound ahead of the Fed decision. ^[26]
Bloomberg’s 5 December feature similarly highlighted that “volatility has vanished across Wall Street,” with traders crowding into high‑conviction risk bets as the defining pattern of 2025 reasserts itself. ^[27]

In short, investors have stopped paying up for insurance. That’s good news for carry traders and short‑volatility strategies – but it also creates vulnerabilities if the macro narrative suddenly shifts.

Why Strategists Say the Calm Could Be Deceptive

Low volatility doesn’t mean low risk. Several pieces from 5–7 December stress that policy uncertainty and stretched valuations still loom large.

A divided Fed = potential for a volatility shock

Reuters’ “Wall St Week Ahead” article makes clear that next week’s Fed meeting is shaping up to be one of the most contentious in years:

At least five of twelve FOMC voters have expressed skepticism or outright opposition to another cut. ^[28]
The last time the Fed saw three or more dissents at a single meeting was 2019; such episodes are rare and closely watched. ^[29]
Nomura’s chief developed‑markets economist is quoted as saying markets are underpricing the risk that the Fed chooses not to cut, even though futures treat it as almost a done deal. ^[30]

If the Fed fails to cut, or cuts but sounds unexpectedly hawkish on future moves, the gap between market expectations and reality could trigger an abrupt repricing – and a rapid bounce higher in the VIX.

Even some bulls acknowledge this. One equities portfolio manager at Janus Henderson told Reuters that while the December decision might not matter much for multi‑year returns, “there could be some short‑term volatility” if the message wrong‑foots investors. ^[31]

Earlier in 2025, volatility returned very quickly

Strategists have fresh memories of how fast volatility can come back:

In April, tariffs and global growth fears drove the VIX from the low‑20s to around 60 in a matter of days; the Euro Stoxx 50 volatility index simultaneously saw a jump comparable (in magnitude) to moves last seen during the 2008 crisis. ^[32]
In November, doubts about AI‑stock valuations and mixed Fed messaging sparked another bout of volatility. A Reuters analysis on 23 November flagged the VIX holding above 20 as evidence of lingering investor anxiety, even though equity indices were only modestly off their highs. ^[33]

In both cases, volatility returned from relatively benign levels once the narrative shifted. That’s why several December outlook notes – including pieces from large asset managers and independent strategists – emphasize that today’s low readings should not be confused with a durable regime change. ^[34]

What the 5–7 December Forecasts Are Saying About VIX and World Indices

Pulling together the various forecasts and analyses published between 5 and 7 December, a few themes stand out.

1. Base case: low but slightly higher volatility after the Fed

Most macro notes expect some pickup in volatility around the Fed meeting – especially in shorter‑dated VIX and VSTOXX futures – but not a sustained spike unless the policy outcome diverges sharply from expectations. ^[35]
Equity strategists broadly see limited downside for the S&P 500 if the Fed simply cuts by 25 bps and reiterates a data‑dependent stance. Many argue that scenario is already “baked into” prices, so index moves might be modest even if the VIX blips higher. ^[36]

2. Risk scenario: AI, earnings and macro surprises re‑ignite volatility

Several analysts still warn of “air pockets”:

November’s AI‑driven selloffs demonstrated how quickly crowded trades can unwind, especially in mega‑cap tech. Notes from Investing.com strategists and others emphasise that liquidity in some AI‑linked names can dry up just when everyone wants out, causing outsize volatility relative to the index move. ^[37]
Global macro updates highlight that while inflation is easing, growth data are mixed, and a government shutdown earlier this quarter has created gaps and lags in key U.S. releases – a recipe for surprises when deferred data (like the November jobs report) finally drop. ^[38]

In this risk scenario, volatility indices could quickly revisit the high‑teens to low‑20s, especially if earnings guidance in early 2026 underwhelms.

3. Regional outlooks: India and Europe

India: With India VIX around 10 and domestic indices pushing to fresh highs after an RBI rate cut, local commentators see room for volatility to rise modestly as traders lock in profits and elections news flow heats up, but not for a structural spike unless global risk sentiment turns. ^[39]
Europe: The VSTOXX sitting a few points above the VIX reflects persistent concerns about European growth and earnings. ECB research and derivatives‑desk commentary suggest European volatility could track the VIX higher if U.S. markets wobble, but is unlikely to collapse to U.S. levels while regional growth remains more fragile. ^[40]

How Traders and Investors Use These Volatility Signals

For readers following VIX and its global cousins between 5–7 December, a few practical takeaways:

VIX and other volatility indices measure expected 30‑day volatility, not whether markets are bullish or bearish. A low VIX doesn’t guarantee rising prices; it simply means options markets are pricing smaller swings. ^[41]
Cross‑market comparisons matter. Seeing the VIX at ~15, VSTOXX near ~20, India VIX around 10 and JGB VIX near 4 tells you where investors perceive more or less risk – U.S. and India equities are seen as relatively stable, while European stocks and Japanese bonds carry more perceived uncertainty per unit of time. ^[42]
Volatility can be both a risk indicator and a trading tool.
- Rising VIX often coincides with equity drawdowns, but its spikes also create opportunities for options sellers and volatility‑targeting strategies once stress recedes.
- Low volatility periods, like the current one, reward carry and short‑volatility trades – but leave portfolios more vulnerable if a shock arrives.
Don’t treat volatility indices as a timing crystal ball. April and November showed that volatility spikes often arrive after risks have already built up quietly. Many professional investors use VIX and its global peers as one input among many – alongside earnings, macro data and liquidity indicators – rather than a stand‑alone buy‑or‑sell signal. ^[43]

Important: Nothing here is investment advice. Volatility products and options are complex instruments that can result in rapid losses. Always consider your own risk tolerance and, if needed, consult a qualified adviser before making trading decisions.

The Bottom Line for 5–7 December 2025

VIX has slid back to the mid‑teens, near year‑to‑date lows, even after a year of dramatic spikes.
World volatility indices – VSTOXX, India VIX, S&P/JPX JGB VIX and the MOVE index – are likewise subdued, painting a picture of broad market composure. ^[44]
Global equity indices are flirting with record highs as investors price in a December Fed cut and softer inflation. ^[45]
Forecasters between 5 and 7 December largely expect only a mild pick‑up in volatility around the Fed meeting – unless policymakers surprise on rates or guidance. Still, the memory of April and November’s shocks is keeping a minority of investors wary. ^[46]

For now, VIX and its global counterparts are sending a clear message: markets are calm, not carefree. The next test of that calm arrives in a few days, when the Fed finally moves from expectation to action.

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