Volatility Soars as China Hits Back with Tariffs; Bitcoin Retreats to $82.5K
Financial markets faced renewed turbulence on Friday after China imposed sweeping retaliatory tariffs on U.S. imports, escalating tensions sparked by President Trump’s latest trade measures earlier in the week.
The CBOE Volatility Index (VIX), often referred to as Wall Street’s “fear gauge,” surged to 39 — its highest reading since October 2020 — signaling a sharp rise in investor anxiety. U.S. stock-index futures also took a hit, dropping more than 2% in early trading.
Bitcoin (BTC) pulled back to $82,500 after briefly climbing above $84,600, according to CoinDesk data. The move came as Deribit’s 30-day DVOL index jumped to an annualized 54.6%, marking a two-week high in expected price volatility for the digital asset.
The geopolitical shock also pushed traders to reevaluate the Federal Reserve’s monetary policy trajectory. CME’s FedWatch tool now shows markets pricing in 116 basis points of rate cuts by the end of 2025 — a notable increase from earlier in the week.
With macro pressure mounting, investors are bracing for more swings ahead as global markets digest the fallout from the trade war escalation.
