CNN's Fear and Greed Index — What it Means for Global Markets (Updated October 2025)

Recent instances of extreme fear

Understanding past instances of extreme fear, as well as greed, can provide insights into current market conditions. Here's how the market shaped up for the last 6 months:

1. June 18, 2025: Fed caution amid trade tensions

The US Federal Reserve left interest rates unchanged but warned that tariffs could reignite inflation, dialing back its expected pace of rate cuts. Traders were “on edge” as policymakers acknowledged greater uncertainty from President Trump’s tariff plans and rising inflation expectations.

In the wake of the Fed meeting, Treasury yields jumped as goods inflation risk had “picked up” in Powell’s press conference. Meanwhile equities wobbled: the S&P 500 ended essentially flat as investors digested the Fed’s hawkish tilt and elevated tariff.

2. September 2, 2025: Tariff legality sparks risk‑off move

Uncertainty about Trump’s trade policies sparked a market selloff. “Doubts about the legality” of new tariffs over Labor Day weekend triggered a broad risk‑off move across global markets. Investors braced for volatility as these legal questions converged with longstanding worries over Fed independence.

The market reaction was equally swift. The CBOE VIX (volatility index) jumped and US stock indexes fell in relation to the sell-off. In particular, the S&P 500 slid about 0.7 percent around the same period, while long‑term Treasury yields spiked amid a global bond selloff. This sudden rush to safety mirrored the market’s anxiety over the renewed trade war risks.

3. October 10, 2025: New China tariffs shock markets

President Trump stunned investors by announcing 100 percent tariffs on Chinese imports. The revived trade threats stoked investor fears and sparked a sharp sell‑off by investors. By the end of that week, all three major indexes had dropped steeply: the S&P 500 and Nasdaq suffered their largest single‑day percentage losses since early April.

The shock rippled into crypto markets as well. Crypto assets plunged in tandem: Trump’s tariff announcement sent bitcoin tumbling, as record liquidations followed–over US$19 billion in leveraged crypto positions were wiped.

Recent instances of extreme greed

1. July 23, 2025: U.S. stocks surge to new highs

Major US stock indexes hit all‑time highs on a wave of optimism about easing trade frictions. The S&P 500 and Nasdaq both closed at record levels on July 23, bolstered by news of tentative trade agreements with the EU and Asia. Tech and industrial stocks led the advance, sending the S&P up ~8 percent year‑to‑date by late July.

The CBOE VIX “fear gauge” fell to its lowest level in over five months on that day. Surveys also confirmed the bullish mood: about 62% of investors in a July poll expected markets to rise, the highest bullish reading in years. These conditions pushed CNN’s Fear & Greed Index into extreme greed territory (above 75) as momentum indicators flashed broad optimism.

2. July 12, 2025: Crypto markets hit extreme greed

Crypto sentiment peaked in mid‑July. According to market trackers, the Crypto Fear & Greed Index jumped to 79 on July 12, firmly into the “Extreme Greed” zone. This reflected booming prices and trading volumes: Bitcoin and other major tokens were rallying after months of gains, and even some institutional investors were accumulating cryptocurrencies.

3. August 28, 2025: AI rally and Fed hope extend the bull run

At the end of August, stocks continued climbing to records on excitement over artificial intelligence and Fed easing. On Aug. 28 the S&P 500 closed at 6501.86 (a new all‑time high) and the Nasdaq at 21,705.16. AI‑related companies powered these gains, and even defensive sectors saw broad strength.

Around this time, markets were also highly confident the Fed would start cutting rates in 2025 (the CME FedWatch tool showed >80 percent odds of a September cut). This “easy money” outlook amplified greed as traders piled into risk assets.

How do other fear-based indexes compare?

While CNN’s Fear and Greed Index is a popular barometer of market sentiment, it isn’t the only fear-based indicator worth watching. Here’s how other major sentiment gauges compare:

Crypto Fear & Greed Index

The Crypto Fear & Greed Index tracks investor sentiment in the cryptocurrency market. Crypto markets are particularly sensitive to risk-off sentiment, making this index an important measure for digital asset investors.

The Crypto Fear & Greed Index has also dropped into extreme fear, with a score of 15 on March 4. This decline coincided with continued geopolitical tensions, including Trump’s announcement of 25 percent tariffs on Canada and Mexico.

Doomsday Clock

Though not a financial index, the Doomsday Clock, updated annually by the Bulletin of Atomic Scientists, reflects global existential risks, including nuclear tensions, climate change and geopolitical instability.

As of January 28, 2025, the clock was at 89 seconds to midnight, signaling heightened global uncertainty, which can influence investor sentiment in risk assets like equities and cryptocurrencies.

What extreme fear means for investors

The plunge of CNN’s Fear and Greed Index into Extreme Fear territory signals widespread investor anxiety. But is this a warning of further declines, or a contrarian buy signal?

Historically, moments of extreme fear have often preceded strong market rebounds, as panicked selling creates opportunities for value investors. However, not all instances lead to immediate recoveries; some mark the beginning of prolonged downturns, and it can be difficult to tell which scenario is ahead.

Key considerations for investors:

• Economic data: Keep an eye on employment reports, inflation data and GDP growth figures.
• Fed policy: Interest rate decisions will continue to be a key driver of market sentiment.
• Corporate earnings: Weak earnings reports could exacerbate investor fears, while strong results may signal resilience.
• Geopolitical developments: Trade tensions, global conflicts and macroeconomic policies can shift market sentiment quickly.

While fear-based indicators provide valuable insights, investors should use them alongside fundamental and technical analysis to make informed decisions. Whether this moment marks a temporary panic or the start of a broader downturn remains to be seen, but one thing is clear: investors should be prepared for volatility in the weeks or months ahead.