VIX Spikes 8% As Stocks Sink; Bonds, Gold Rise On Growth Concerns; Meme Stocks Roar, Peso Plummets: What's Driving Markets Monday?

All major U.S. equity indices opened the week with losses, as traders shifted to safe-haven bonds and gold amid concerns affecting the health of the U.S. manufacturing activity. In May, the ISM Manufacturing PMI dropped to 48.7, marking a faster-than-expected contraction.

This follows a bleak Chicago PMI report on Friday, which indicated the worst sentiment since May 2020.

The CBOE Volatility Index (VIX), known as the market fear gauge, surged by 9% on a day marred by temporary technical glitches affecting several NYSE-listed stocks, including Berkshire Hathaway Inc. BRK BRK and Chipotle Mexican Grill Inc. CMG.

At 12:40 p.m. in New York, the Nasdaq 100 index was down 0.5%, eyeing its fourth consecutive session of declines, potentially marking its longest losing streak since early January 2024.

The Dow Jones Industrial Average underperformed tech-heavy indices due to sharp losses in the energy and industrials sectors, weighing down the blue-chip index.

Treasury yields fell nearly 10 basis points, marking the highest one-day decline in yields since May 15 and the third-largest drop of the year. Bond-related assets surged, with the iShares 20+ Year Treasury Bond TLT gaining 1.2%, aiming for its third consecutive day of gains.

As yields dropped, gold rose by 0.9%, fully recovering Friday’s losses, while Bitcoin BTC/USD was up by 2.3%.

Monday’s Performance In Major US Indices, ETFs

According to Benzinga Pro data:

• The SPDR S&P 500 ETF Trust SPY was 0.6% lower to $524.01.
• The SPDR Dow Jones Industrial Average DIA fell 1% to $383.56.
• The tech-heavy Invesco QQQ Trust (ARCA: QQQ) fell 0.2% to $449.52
• Sector-wise, the Health Care Select Sector SPDR Fund XLV outperformed, up by 0.2%, while the Energt Select Sector SPDR Fund XLK lagged, down 2.8%.
• Industry-wise, the SPDR S&P Retail ETF XRT, outperformed, up 1.4%.

Monday’s Stock Movers

• Paramount Global PARA rallied over 7% after the company announced it has agreed to the terms of a merger with Skydance, with the official announcement expected in the coming days.
• Meme stocks like GameStop Corp. GME and AMC Entertainment Holdings Inc. AMC experienced a sudden spike after trader Keith Gill, known as “Roaring Kitty” on Reddit, posted a screenshot showing that he holds GME shares valued at $115.7 million.
• Lattice Semiconductor Corp. LSCC plunged over 15% after its president and CEO, Jim Anderson, left to lead laser maker Coherent Corp. COHR, which saw a 17% rally.
• Spotify Technology S.A. SPOT rose 4% after the music-streaming giant announced heightened subscription costs for its premium users.
• Science Applications International Corp. SAIC plummeted 12% after missing revenue estimates last quarter.

Market-Moving Events Outside The US:

In emerging markets, Mexican assets experienced a sharp decline following Claudia Sheinbaum‘s landslide victory in the country’s presidential election on Sunday.

The Mexican Peso tumbled as much as 4.3% against the dollar, marking its worst trading day since March 16, 2020.

Mexican stocks sold off heavily, with the iShares MSCI Mexico ETF EWW dropping 10%, also its worst day since March 16, 2020, when it tumbled 15%.

Read now: Mexican Peso Suffers Worst Day In Four Years After Sheinbaum Wins Presidential Elections

Image generated using artificial intelligence via Midjourney.