Only a matter of time until we see volatility bleed into equity markets: RBC's Amy Wu Silverman

The derivatives market currently fails to price in "P-Doom"—the existential risk posed by artificial intelligence—treating it as a non-factor despite its potential to disrupt critical infrastructure. While equity indices remain buoyed by a narrow group of AI-focused companies, the broader market exhibits weak breadth, with most stocks showing negative beta. A significant disconnect persists between low equity volatility (VIX) and elevated volatility in bond (MOVE) and oil markets, signaling that a volatility correction is likely overdue. Furthermore, upcoming elections offer no guarantee of market clarity; persistent anti-AI sentiment and regulatory uncertainty will continue to weigh on the left tail of market outcomes. Amy Wu Silverman, Head of Derivatives Strategy at RBC Capital Markets, emphasizes that investors should anticipate an inevitable bleed of these macro-volatility pressures into the equity space.