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The Trump administration’s chaotic tariff policies and escalating geopolitical tensions in the Middle East are making investors anxious, pushing them toward safe-haven assets. The S&P 500 has faced increased volatility in 2025, with the broad market index falling 2.7% and then rebounding 4.1% over the past month.
The index fell about 1.1% on June 13, driven by intensifying protests and mounting Iran-Israel tensions.
Investors Are Playing Defense
According to SP Global, U.S. investors remained risk-averse for the fifth consecutive month, even as equity market concerns have been easing. Per an investor sentiment survey, according to the S&P Global Investment Manager Index, the risk appetite of investors has been gradually increasing since April. Yet, June’s reading has remained negative, highlighting continued caution.
Even with easing in risk aversion, according to SP Global, investors continue to forecast net market losses in the month ahead. The survey’s Equity Returns Index fell to -32% in June from -29% in May, reflecting a modest decline in investor confidence and a slightly more pessimistic outlook compared to the previous month.
Buckle Up for Choppier Markets in the Short Term
According to Kathryn Rooney Vera, chief market strategist at StoneX Group, as quoted on Reuters, with the market being highly sensitive to headlines and short-term events, short-term market swings have intensified.
Struggling with escalating tensions in the Middle East after renewed military strikes between Israel and Iran, concerns over potential supply disruptions are a headwind. According to Rooney Vera, a possible closure of the Strait of Hormuz could restrict global oil supply chains, driving up prices and accelerating inflationary pressures.
Planned protests across major U.S. cities are drawing investor attention. According to Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder, as quoted on Reuters, the ongoing protests could dampen investor confidence, from a psychological perspective. Any blow to investor sentiment or risk appetite could further weigh on the S&P 500, adding to the headwinds it already faces in the near term.
ETFs to Explore
In periods of rising uncertainty, increasing exposure to volatility ETFs in the short term can be a winning move for investors. These funds have delivered short-term gains during periods of market chaos and could climb further if volatility endures.
In the current economic environment, volatility-focused funds and strategies are ideal to reassess volatility exposure and for investors with a short-term horizon.
With volatility rising due to trade tensions, policy uncertainty, geopolitical conflict and technical market breakdowns, increasing exposure to the below-mentioned funds can be a good strategic move (See: all Volatility ETFs here).
iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX - Free Report)
iPath Series B S&P 500 VIX Short-Term Futures ETN seeks to track the performance of the S&P 500 VIX Short-Term Futures Index Total Return and has amassed an asset base of $375.1 million. The index offers exposure to a daily rolling long position in the first and second month VIX futures contracts.
VXX charges an annual fee of 0.89% and has a one-month average trading volume of about 4.39 million shares.
iPath Series B S&P 500 VIX Short-Term Futures ETN has gained 17.87% over the past three months and 16.56% over the past year.
ProShares VIX Short-Term Futures ETF seeks to track the performance of the S&P 500 VIX Short-Term Futures Index and has amassed an asset base of $179.5 million. The index measures the movements of a combination of VIX futures and is designed to track changes in the expectation for one month in the future.
The fund is ideal for investors looking to gain from an increase in expected volatility of the S&P 500. VIXY has a one-month average trading volume of about 1.1 million shares.
ProShares VIX Short-Term Futures ETF has gained 17.48% over the past three months and 14.66% over the past year. The fund charges an annual fee of 0.85%.
ProShares VIX Mid-Term Futures ETF seeks to track the performance of the S&P 500 VIX Mid-Term Futures Index and has amassed an asset base of $21.4 million. The index measures the movements of a combination of VIX futures and is designed to track changes in the expectation for VIX five months in the future.
The fund is ideal for investors looking to gain from an increase in expected volatility of the S&P 500. VIXM has a one-month average trading volume of about 98,000 shares.
ProShares VIX Mid-Term Futures ETF has gained 12.64% over the past three months and 22.03% over the past year. The fund charges an annual fee of 0.85%.
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Play Short-Term Market Volatility With These ETFs
The Trump administration’s chaotic tariff policies and escalating geopolitical tensions in the Middle East are making investors anxious, pushing them toward safe-haven assets. The S&P 500 has faced increased volatility in 2025, with the broad market index falling 2.7% and then rebounding 4.1% over the past month.
The index fell about 1.1% on June 13, driven by intensifying protests and mounting Iran-Israel tensions.
Investors Are Playing Defense
According to SP Global, U.S. investors remained risk-averse for the fifth consecutive month, even as equity market concerns have been easing. Per an investor sentiment survey, according to the S&P Global Investment Manager Index, the risk appetite of investors has been gradually increasing since April. Yet, June’s reading has remained negative, highlighting continued caution.
Even with easing in risk aversion, according to SP Global, investors continue to forecast net market losses in the month ahead. The survey’s Equity Returns Index fell to -32% in June from -29% in May, reflecting a modest decline in investor confidence and a slightly more pessimistic outlook compared to the previous month.
Buckle Up for Choppier Markets in the Short Term
According to Kathryn Rooney Vera, chief market strategist at StoneX Group, as quoted on Reuters, with the market being highly sensitive to headlines and short-term events, short-term market swings have intensified.
Struggling with escalating tensions in the Middle East after renewed military strikes between Israel and Iran, concerns over potential supply disruptions are a headwind. According to Rooney Vera, a possible closure of the Strait of Hormuz could restrict global oil supply chains, driving up prices and accelerating inflationary pressures.
Planned protests across major U.S. cities are drawing investor attention. According to Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder, as quoted on Reuters, the ongoing protests could dampen investor confidence, from a psychological perspective. Any blow to investor sentiment or risk appetite could further weigh on the S&P 500, adding to the headwinds it already faces in the near term.
ETFs to Explore
In periods of rising uncertainty, increasing exposure to volatility ETFs in the short term can be a winning move for investors. These funds have delivered short-term gains during periods of market chaos and could climb further if volatility endures.
In the current economic environment, volatility-focused funds and strategies are ideal to reassess volatility exposure and for investors with a short-term horizon.
With volatility rising due to trade tensions, policy uncertainty, geopolitical conflict and technical market breakdowns, increasing exposure to the below-mentioned funds can be a good strategic move (See: all Volatility ETFs here).
iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX - Free Report)
iPath Series B S&P 500 VIX Short-Term Futures ETN seeks to track the performance of the S&P 500 VIX Short-Term Futures Index Total Return and has amassed an asset base of $375.1 million. The index offers exposure to a daily rolling long position in the first and second month VIX futures contracts.
VXX charges an annual fee of 0.89% and has a one-month average trading volume of about 4.39 million shares.
iPath Series B S&P 500 VIX Short-Term Futures ETN has gained 17.87% over the past three months and 16.56% over the past year.
ProShares VIX Short-Term Futures ETF (VIXY - Free Report)
ProShares VIX Short-Term Futures ETF seeks to track the performance of the S&P 500 VIX Short-Term Futures Index and has amassed an asset base of $179.5 million. The index measures the movements of a combination of VIX futures and is designed to track changes in the expectation for one month in the future.
The fund is ideal for investors looking to gain from an increase in expected volatility of the S&P 500. VIXY has a one-month average trading volume of about 1.1 million shares.
ProShares VIX Short-Term Futures ETF has gained 17.48% over the past three months and 14.66% over the past year. The fund charges an annual fee of 0.85%.
ProShares VIX Mid-Term Futures ETF (VIXM - Free Report)
ProShares VIX Mid-Term Futures ETF seeks to track the performance of the S&P 500 VIX Mid-Term Futures Index and has amassed an asset base of $21.4 million. The index measures the movements of a combination of VIX futures and is designed to track changes in the expectation for VIX five months in the future.
The fund is ideal for investors looking to gain from an increase in expected volatility of the S&P 500. VIXM has a one-month average trading volume of about 98,000 shares.
ProShares VIX Mid-Term Futures ETF has gained 12.64% over the past three months and 22.03% over the past year. The fund charges an annual fee of 0.85%.