Warning Signals Flashing! UBS Warns U.S. Stock Fragility Hits Near Two-Year High; Last Similar Signal Triggered VIX Surge

UBS's "Turbu-lens" index, which measures U.S. stock market fragility, recently rose to 1, hitting the highest reading on the gauge for the first time since late 2024, indicating a significant decline in the market's resilience to shocks. The last time this index peaked, volatility spiked. With the September Federal Reserve meeting and November midterm elections approaching, the options market has begun pricing in risks of significant volatility.