Volatility In Markets Decreases Further, Here's Why

U.S. stocks closed slightly lower on Wednesday, after recording gains for two straight sessions.

Data released Wednesday showed strong US labor demand, which suggested that the Fed will continue to increase interest rates for longer. Private sector employment increased by 208,000 jobs in September, according to a new ADP National Employment Report. The number was up from a revised 185,000 in August and also came in above average economist estimates of 200,000.

Shares of Microsoft Corporation MSFT and Amazon.com, Inc. AMZN), traded slightly higher on Wednesday.

The Nasdaq 100 slipped 0.08% to close at 11,573.18 on Wednesday, while the S&P 500 fell 0.20%. The Dow Jones declined around 42 points to settle at 30,273.87 in the previous session.

Majority of the sectors on the S&P 500 closed on a lower note, with utilities and real estate stocks recording the biggest decline on Wednesday. However, energy stocks bucked the overall market trend, gaining over 2% in the previous session.

The Chicago Board Options Exchange's CBOE Volatility Index (VIX) fell 0.9% to 28.80 points.

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.