LIVE MARKETS-VIX spikes, S&P 500 slides as Middle East conflict fuels uncertainty

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VIX SPIKES, S&P 500 SLIDES AS MIDDLE EAST CONFLICT FUELS UNCERTAINTY

Wall Street's main indexes are falling more than 2% on Tuesday, with the S&P 500 hitting its lowest in over two months, as investors brace for the impact of a widening Middle East conflict on oil prices, inflation and global trade.

The S&P 500 .SPX is sliding more than 2% to around 6,735, which has it threatening to close below its 100-day moving average (DMA), which now resides around 6,835. Since May 12, 2025, the S&P 500 has seen just one minor closing violation of this longer-term moving average, which was on November 20. That day marked the low close in the more than 5% selloff from the October 28 then-record close.

The SPX is now down 3.5% from its 6,978.60 January 27 record close, and down 3.9% from its 7,002.28 January 28 record intraday high.

Of note, the CBOE Volatility Index .VIX, which is often referred to as the market's "fear gauge," but may be more accurately described as an "uncertainty index," hit 28.15, or its highest level since 28.27 on November 20. It has since deflated back to around 27. The VIX hit 28.99 on October 17 of last year. Its April 2025 spike peaked at 60.13.

The S&P 500 has a number of significant support levels in the 6,480-6,565 area. This zone includes the rising 200-DMA, the broken resistance line from 1929, which is now support, a weekly Gann Line, and the 23.6% Fibonacci retracement of the April 2025-January 2026 advance.

A decline to this zone would put the SPX down around 6%-7.5% from its record highs.

(Terence Gabriel)

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