Wall Street's fear gauge — the VIX — saw second-biggest spike ever on Wednesday

The spike in the VIX indicates heightened investor concern about market conditions, particularly given the Fed's dampened rate-cutting outlook, which is typically viewed unfavorably by the equity market. The steep drop in the Dow Jones also reflects this anxiety among investors. As such, while the short-term volatility may create opportunities, the overall sentiment is leaning negative for broader market stocks as uncertainty persists.

Investors may look to mitigate risk through protective positions. The surge in volatility often leads to increased demand for volatility-tracking ETFs such as VXX (iPath Series B S&P 500 VIX Short-Term Futures ETN), which are designed to rise when market volatility increases. This presents a potential opportunity for investors looking to capitalize on short-term fluctuations.