Markets are under substantial pressure, and the situation could get far worse. 

That’s because the U.S.-Iran conflict is showing no meaningful signs of cooling off, and each new development appears to add another layer of risk. Most recently, oil prices surged back above $108 a barrel, inflation is ticking higher, yields are spiking, and there are fears consumers may be pulling back on spending.

In fact, there are also growing concerns that consumers could begin pulling back on spending. American consumers have been one of the strongest pillars supporting the economy over the past two years. However, persistent inflation, elevated interest rates, and geopolitical uncertainty may weaken consumer confidence. If spending begins to slow meaningfully, economic growth could soften, increasing fears of a broader market correction.

Adding to investor anxiety is the possibility that the Federal Reserve may postpone interest rate cuts far longer than expected. According to analysts at Bank of America, the Fed may now need to delay lowering rates until the second half of 2027 due to stubborn inflation pressures. That marks a dramatic shift from earlier expectations for two interest rate cuts this year, based on the expectation that Kevin Warsh would steer policymakers toward easing monetary policy.

But that view has changed with a shifting economic backdrop. 

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Now, as uncertainty rises, volatility often increases rapidly, creating both risks and opportunities for traders. While long-term investors may choose to remain defensive and stay on the sidelines, short-term traders often look for ways to benefit from market swings through volatility-focused exchange-traded products.

Look at the ProShares Ultra VIX Short-Term Futures ETF (UVXY), for example.

This ETF is structured to deliver two times (2x) the daily performance of the S&P 500 VIX Short-Term Futures Index, making it highly sensitive to spikes in market volatility. 

S&P 500 VIX Short Term Futures ETN (VXX)

Another option is the VXX, which offers exposure to the same underlying volatility index but without leverage. 

ProShares VIX Short Term Futures ETF (VIXY)

The VIXY provides long exposure to short-term VIX futures contracts, with a weighted average maturity of about one month.  

In times like these, volatility becomes both a risk and an opportunity. While long-term investors may prefer to stay cautious and focus on risk management, short-term traders can look to instruments like these ETFs and ETNs to potentially benefit from rapid market swings. 

Sincerely,

Ian Cooper