Market volatility has picked up under a calm surface

Chart of the Week

Sep 4, 2026

2 MIN READ

Market volatility has picked up under a calm surface

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U.S. stocks have continued to grind higher, masking a much more volatile market beneath the surface, particularly at a single-stock and factor level.

authors

Christopher Bole

Vice President, Financial Writer

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U.S. equity market volatility: Index, stock and factor level

Line chart showing rolling 6-month standard deviation of weekly returns at an index, stock and factor levels.

Source: Bloomberg, as of August 27, 2026. Chart shows rolling 6-month standard deviation of weekly returns. Index volatility shows S&P 500. Single-stock volatility shows the average volatility of S&P 500 constituents. Factor volatility shows the average volatility of six major U.S. equity factors: Momentum, Value, Size, Low Volatility, Growth and Quality.

U.S. stocks have shaken off a range of macro headwinds over the past year, lifting the S&P 500 to near all-time highs.
The advance has appeared relatively calm, with index-level volatility remaining slightly below its average since 2017.¹
Beneath the surface, however, market conditions have been far more turbulent. Single-stock volatility sits near a six-year high, while factor volatility has retraced much of its multiyear decline.¹
In other words, volatility has not disappeared, it has migrated beneath the index level as markets digest energy shocks, AI-driven disruption and shifting industrial policy.
Historically, periods of elevated dispersion such as today’s have widened the gap between winners and losers, providing a favorable backdrop for active managers.

contributing authors

Christopher Bole

Vice President, Financial Writer

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footnotes + disclosures

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