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There goes the fear – again.

Wall Street’s “fear gauge” is heading towards its lowest closing level in three years, after the first round of the French presidential election calmed investor nerves over another populist upset, and US President Donald Trump promised to cut the US corporate tax rate to 15 per cent.

The Chicago Board Options Exchange’s Volatility Index, known as Vix after its stock market ticker, tracks the prices of short-term options on the S&P 500. It is designed to reflect how turbulent investors think the US stock market will be over the next 30 days.

Vix had been creeping higher this month ahead of last weekend’s French election, as optimism over the US administration’s promised stimulus package faded. It collapsed by the most since 2011 on Monday, however, after the centrist candidate Emmanuel Macron performed well in the first round of French voting.

Mr Trump’s promise to slash the US corporate tax rate to 15 per cent has poured more fuel on the global stock market rally, pushing the Vix to a low of 10.22 on Tuesday. It is currently trading at 10.55, which if maintained would be the lowest closing level since 2014.

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