The VIX Volatility Index traded as high as 18.70 on Wednesday, its highest level since May 25. That means the current level of implied volatility is higher than 84% of other occurrences in the last 12 months.

Investors worry that the Fed's commitment to keeping interest rates high for a long period of time to combat inflation could slow the economy and reduce corporate profit margins. The looming government shutdown and the rapidly approaching Oct. 1 deadline are fueling anxiety. Government bond yields across all maturities remain at levels not seen in more than a decade.

Minneapolis Fed President Neel Kashkari struck a hawkish tone this week, saying there was a 40% chance the Fed would have to raise interest rates sharply to combat inflationary pressures.

In terms of new “fear gauges”, that appear to become more and more acclaimed lately for hedging purpose amidst increasingly erratic behavior of major U.S. stocks, including hi-tech stocks such as Tesla (TSLA) and Apple (AAPL), the new CBOE S&P 500 Dispersion Index (DSPX) was recently introduced by CBOE and expands its leading suite of volatility indices. In fact, DSPX is the first index designed to measure the dispersion of expectations for the S&P 500 Index. The goal is to gain a deeper understanding of the volatility of the S&P 500 Index and its constituent stocks.