Market Volatility Declines Slightly On The First Trading Day Of August

U.S. stocks extended their rebound on Friday, amid further decline in the US dollar, as investors cheered strong corporate earnings results despite higher labor costs and continuous rise in inflation.

Better-than-expected earnings from Apple Inc AAPL and Amazon.com Inc AMZN lifted overall market sentiment, while energy companies including Exxon Mobil XOM and Chevron Corp CVX also released record revenue, amid increasing oil and natural gas prices.

U.S. labor costs, however, rose sharply in the second quarter while consumer spending also increased 1.1% from a month ago in June, according to the U.S. Commerce Department.

The Federal Reserve, last week, raised interest rates by 75 bps in order to combat surging inflation.

The Dow Jones gained around 1%, while the S&P 500 and Nasdaq Composite added approximately 1.4% and 1.9%, respectively on Friday. The S&P 500 and Nasdaq have recorded their largest monthly gains in terms of percentage since 2020.

Majority of the sectors on the S&P 500 settled higher, with energy stocks recording the biggest surge on Friday. Consumer staples, however, was the worst performing sector in the previous session, dropping around 0.7%.

U.S. stock futures, however, traded lower this morning on Monday after recording sharp gains in the previous week.

The Chicago Board Options Exchange's CBOE Volatility Index (VIX) fell 0.1% to 22.32 points on Monday.

Investors are now awaiting the release of several economic reports, including manufacturing PMI and construction spending today.

What is CBOE Volatility Index?

The CBOE Volatility Index, popularly known as VIX, is a measure of the equity market's expectation of volatility based on S&P 500 index call and put options.