By Saqib Iqbal Ahmed
NEW YORK, Feb 1 (Reuters) – Volatility-linked funds estimated to be buying as much as $2 billion in U.S. equities daily are helping drive this year’s rebound in stocks and may ramp up purchases in coming weeks, though a hawkish Federal Reserve could spoil the party.
The S&P 500’s .SPX 6.2% surge in January has been accompanied by a drop in measures of volatility across the board. Daily swings in the index over the past month were the smallest since early 2022, while the Cboe Volatility Index .VIX also stands near a one-year low.
The drop in market gyrations has triggered a buy-signal for certain computer-driven strategies including volatility control funds, risk parity…
