Volatility Returns to Markets as Investors Grapple with Fed Uncertainty, Geopolitical Tensions

Volatility has returned to markets recently as uncertainty grows about Fed interest rate plans and rising bond yields.

The VIX volatility index hit 21 last week for the first time since a regional banking crisis in March.

Multiple headwinds are weighing on stocks, including geopolitical tensions, recession fears, leadership uncertainty in Washington, high bond yields and resilient oil prices.

While the market rally has paused, stocks have been resilient despite the challenges and have not seen a major selloff.

Investors want clarity on when the Fed may stop hiking rates, which could calm volatility, but the path forward remains unclear.