Wall Street fear gauge jumps most since 'Liberation Day' as AI trade stumbles

Wall Street's VIX fear gauge posted its largest intraday jump in over 18 months on Thursday as steep losses in chip and data center-related stocks dragged down major indexes, reflecting an unwind of the crowded AI trade. Analysts attributed the selling to a reversal of the previous session's sharp rally and investors cutting risk ahead of expected volatility-driven selling by funds and systematic strategies, with leveraged ETFs amplifying late-day moves. The selloff contrasted sharply with Wednesday's upbeat reaction to the election, and analysts said the key question is whether the AI trade's re-evaluation is a lasting shift or just a temporary rebalance.