The CBOE dispersion index, DSPX, measures the difference in volatility of individual stocks versus the volatility of the S&P 500 index. It peaked during the period of maximum trade uncertainty because the market could not determine the impact of trade tariffs on individual firms. Now that trade risk has declined, the DSPX has also declined, as the market now focuses on other factors that are more likely to impact all stocks. The key question now is whether we will have a recession.
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