The worst may be behind Wall Street at this point, if the decline in the market’s “fear gauge” is any indication. The Cboe Volatility Index (VIX) traded below 24 on Wednesday. That’s well below an intraday peak 65.73 reached Monday — when investors were dumping stocks on fears that the U.S. economy could falter into a recession. “VIX falling from 66 … is a positive sign and further sign this is a ‘growth scare’ with the worst likely behind us,” wrote Tom Lee, head of research at Fundstrat. Lee also pointed to Tuesday’s strong performance in U.S. stocks as an indication of better times ahead. The S & P 500 rallied 1%, clawing back some of the steep losses suffered on Monday. The Dow Jones Industrial Average , which plunged more than 1,000 points to start the week, also popped nearly 300 in the previous session. .SPX 5D mountain SPX 5-day chart Lee noted that while August is historically a “bad month” for stocks, he thinks the “badness” may be frontloaded after the recent sell-off. The noted Wall Street bull added that he sees the Federal Reserve moving forward with the equivalent of five 0.25 percentage-point rate cuts between now and year-end — further boosting his optimistic view on stocks. “Fed getting off data dependence… and become forward looking,” he said. To be sure, not everyone is ready to buy the dip. Strategists at BCA Research warned clients against rushing back into stocks. “The problem is that even if a recession does not come, the path to soft landing is narrowing and potentially at risk from politics. As such, investors should hunker down, own gold and bonds … and watch data,” they wrote. Elsewhere on Wall Street this morning, Piper Sandler reiterated AMD as a top pick. “We continue to like AMD especially given the recent industry pullback. Our expectations see AMD taking roughly 20% share of the $400B accelerator market by 2028. Additionally, reaffirmed by last week’s INTC (not covered) results, we see AMD gaining significant share in the traditional server market,” analyst Harsh Kumar said in a note .
There are some signs emerging the worst of the growth scare has passed
