Wall Street's fear index slides as equities set new record highs

The S&P 500 VIX or volatility gauge, also known as Wall Street's fear index, crashed to 20 on Friday, having reached a multi-month high of 40 at the end of January.

The VIX spiked two weeks ago as co-ordinated buying in out of favor stocks such as GameStop inflicted heavy losses on hedge funds holding short positions and triggered fears of a broad-based market sell-off.

However, these fears subsided last week, with GameStop falling 80%. Besides, comments from the US Treasury Secretary Janet Yellen pushing for fiscal stimulus, improving coronavirus numbers, and upbeat US data calmed market nerves, helping stocks regain poise.

The S&P 500, Wall Street's benchmark index, clocked a new lifetime high of 3894.56 on Friday. The renewed risk-on is bad news for haven currencies such as the US dollar and the Japanese yen.