U.S. stock volatility indicators rebound sharply, and chip stocks' two-month rally hits a sudden halt

BlockBeats News, June 6 — As the semiconductor sector sharply declined, the Cboe Volatility Index (VIX), known as Wall Street's "Fear Index," surged nearly 40% in a single day, marking the largest increase since March this year. The VanEck Semiconductor ETF (SMH) briefly fell nearly 10% during trading, ending a strong rally that had lasted two months and gained approximately 80% in total.

Data shows that on Friday, the S&P 500 index options volume reached a record 7.8 million contracts, up 16% from the high before April. Meanwhile, the 10-year U.S. Treasury yield rose after the release of strong non-farm payroll data, with significant increases in demand for put options on long-term Treasury ETFs (TLT) and investment-grade and high-yield bond ETFs.

Brent Kochuba, founder of options analysis platform SpotGamma, said that the recent abnormal situation where single-stock options premiums are far higher than index options is re-aligning, indicating that the overheated chip stock market needs to cool down. Danny Kirsch, head of options at Piper Sandler, pointed out that a large amount of leveraged ETF funds are concentrated in the semiconductor sector, coupled with financing activities by tech giants like Meta and Alphabet, as well as large IPO issuances, further amplifying market correction pressures.

Affected by the decline in risk appetite, Bitcoin briefly fell below $60k before stabilizing, while the Strategy stock price dropped nearly 7% that day, with put options trading more than twice as much as call options. The Nasdaq index recorded its worst single-day performance since April 2025.