Wall Street’s fear gauge jumped nearly 70% on Thursday as the Nasdaq crashed 5.52%. Sentiment readings now place US stocks in deeper fear than crypto, flipping the usual order.
CNN’s Fear and Greed Index for stocks sits at 20, in extreme fear. The crypto version reads 28, yet it lost 22 points in one day, leaving Bitcoin (BTC) holders exposed to sharper sentiment swings.
Why Did Wall Street’s Fear Gauge Spike 70% in a Day?
The Nasdaq Composite fell 5.52% to 24,315 on November 5, entering correction territory. Meanwhile, the S&P 500 lost 4.36%, and the Philadelphia Semiconductor Index sank 12.25%.
Chipmakers took the heaviest damage. Democrats won Congress and three governor races in major data center states, adding pressure on tech stocks already weighed down by AI spending doubts.
The reversal came fast. Only a day earlier, the Dow had rallied roughly 1,500 points on the same election result.
That whiplash showed up in the Cboe Volatility Index (VIX). Built by Cboe, it tracks the 30-day volatility traders expect, based on S&P 500 options prices. Wall Street calls it the fear gauge.
The VIX closed at 28.18, a gain Barchart ranked as the third-largest in the index’s history. According to TD, readings between 25 and 30 point to growing turbulence, while levels above 30 signal a highly volatile market.
How Deep Does the Fear Run in Stocks?
CNN’s Fear and Greed Index confirms the mood. It blends seven market indicators, including the VIX, options activity, and demand for junk bonds and safe havens.
The index read 20 on Friday morning. In contrast, it stood at a neutral 47 a month ago and 26 last week.
The selloff also crossed the Pacific. South Korea’s main index fell 8.55% on Friday, pushing the KOSPI below 5,000 for the first time since February.
That plunge triggered a 20-minute trading halt in Seoul. SK Hynix and Samsung Electronics, which together make up about half of the index, each lost roughly 10% or more.
Is Crypto’s Fear Close to a Bottom?
Crypto sentiment cracked as well, though from a much higher starting point. The Crypto Fear and Greed Index, published by Alternative.me, dropped to 28 from a neutral 50 one day earlier.
A month ago, the same gauge showed Greed at 71. Crypto analyst CryptoTony expects the slide to deepen before it turns, arguing extreme fear is near and a bottom is close.
Not everyone shares that view. Analyst Benjamin Cowen warned that a 2018-style selloff could send Bitcoin to $58,000.
Historical data offer some support for patience. The Nasdaq traded higher six months after nine of its last 10 Nasdaq corrections.
However, the lone exception came in 2022, when the Federal Reserve (Fed) kept raising rates. Traders now price a 68% chance of another Fed hike in December.
That leaves both markets tied to the same lever. The October jobs report, due later on Friday, may show whether tighter policy keeps the fear gauge elevated in stocks and crypto alike.
