Bank of America Warns S&P 500 Stock Volatility Hits Record High vs VIX, Echoing 2000 Bubble Pattern

According to Bank of America, the S&P 500 stock volatility index hit approximately 50 points this week, up 46% year-to-date, while the broader VIX remained at 16 points, up just 13% for the year. The widening gap between individual stock volatility and overall market volatility has reached historic highs, mirroring conditions seen at the end of the 2000 dot-com bubble, the bank warned.

The divergence reflects recent semiconductor sector selloffs as investors rotate capital away from hot chip stocks. The Invesco Semiconductor ETF (SOXX) has declined 12% from its June high despite gaining 83% year-to-date.