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The VIX is slowly creeping higher as investors become a little more cautious, although volatility remains surprisingly modest considering everything happening around the world. Oil supply disruptions, geopolitical tensions, persistent inflation concerns and pressure across global markets are providing plenty of reasons for nerves, yet the VIX is still signalling caution rather than outright fear.

Oil remains one of the bigger pressure points, with prices climbing again as pipeline problems and production disruptions continue to restrict supply. With crude back above US$100 a barrel, these disruptions are becoming harder to dismiss as temporary noise, particularly if reduced supply begins feeding through to transport, manufacturing and eventually inflation. Higher energy costs also make life considerably more difficult for central banks hoping inflation will continue to ease.

That makes the gradual rise in the VIX worth watching. It isn’t flashing panic, but after a relatively calm period investors are beginning to pay more for protection against market falls. Given the amount of geopolitical and economic uncertainty currently floating around, volatility still looks surprisingly restrained, which raises the question of whether markets are genuinely comfortable or simply haven’t reacted yet.

Meanwhile, the AI boom has developed another fight: regulation. Calls for stronger oversight are growing as AI models become more powerful, but critics are questioning whether some of the biggest technology companies are also using regulation to protect their existing positions.

The argument is relatively simple. Large AI companies can afford compliance teams, audits, testing requirements and increasingly complex regulatory processes, while smaller competitors may struggle with the same burden. Rules designed to make AI safer could therefore have the unintended consequence of making it considerably harder and more expensive for new companies to challenge today’s market leaders.

That creates an interesting problem for markets because AI has become one of the biggest investment themes supporting technology stocks, semiconductor demand and enormous data centre spending. Sensible regulation may be inevitable, but if bureaucracy starts slowing smaller competitors while protecting established giants, the AI race could become considerably less competitive.

For now, markets remain relatively calm, but the ingredients for greater volatility continue to build. Oil is climbing, supply disruptions remain unresolved and the AI industry is entering a regulatory battle that could help determine who gets to participate in its next stage of growth.

This article is general market commentary only and should not be relied upon as personal financial advice. Consider the information carefully, conduct your own independent assessment and seek professional advice where appropriate before making any investment decision.

Enjoy today’s charts

Gold daily chart, with 50MDA