Wall Street’s primary index gauging volatility in the market has reached its highest level since Covid-19 shuttered the entire global economy, suggesting catastrophic times are ahead in the not-too-distant future.

Global markets plunged Monday morning as selloffs among traders stoked fears that a recession is on the horizon. Nasdaq futures fell 5% one business day after last month’s jobs report showed a slowdown in hiring, coupled with remarks by Fed chairman Jerome Powell suggesting he would delay any rate cut until at least September. The selloff began in the early morning hours in Japan where the Nikkei 225 fell 12%, the greatest drop since the crash of Black Monday in 1987, according to the Wall Street Journal. Shortly thereafter, American markets punished its tech sector, with shares of Nvidia, Meta and Apple each losing 9% or more. Berkshire Hathaway announced it would begin unwinding its stake in the iPhone maker, adding insult to injury. The European STOXX 600 declined 2.6% at 487.15 points, its lowest since Feb. 13, the New York Post reported.

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The CBOE Volatility Index (VIX), which tracks turbulence in American markets, has been the gold standard for gauging uncertainty during periods of financial unrest dating back to 2004. Using data from the past 30 days, the VIX computes what markets may do in the near future, giving traders a window into whether the floor will be filled with calm waters or a churning sea of waves. Unlike other stocks, VIX cannot be bought or sold directly, so instead traders must grab a stake through ETFs or other derivatives. The index stood at 65 on Monday morning, the highest since March of 2020 when it sat at 85.47, CNBC reported.

BREAKING — Wall Street’s ‘fear gauge’ – Vix market volatility index sees third biggest jump in history, nearing 2008 and 2020 crisis levels. pic.twitter.com/7OxOMSAX4b

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Goldman Sachs upgraded its prediction of the chance of a recession from 10% to 25% though cautioned such a risk was “limited,” the outlet added. Still, the flagship Wall Street bank’s note of concern put a fine point on the market’s hope that the Fed will institute emergency rate cuts to keep the market from slipping into historically low levels, especially during the final months of a presidential election year.

Powell has been bearish about cutting rates too soon as the Fed hopes to accomplish a “soft landing” in the market, bringing inflation down to a target rate of 2% without driving a surge in consumer spending and job growth that could throw the economy back into jeopardy. That target appears to have narrowed as of Monday morning, putting another layer of pressure on the Fed chairman to soothe fears on Wall Street. “The Federal Reserve has been late in cutting rates, but that has been true for some time. The policy error is making things worse for lower-income households,” UBS economist Paul Donovan told the New York Times.

Investors who don’t need to liquidate right away should not panic, however, said senior equity analyst Dan Ives of tech outlet Wedbush Securities. Appearing on CNBC Monday, Ives reminded stockholders that while a “massive fear panic” may stoke impulse sell-offs, they should instead “view this as more of an opportunity” to hold their assets through a tough time or look for deals in the price dips.

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