Last week marked a significant shift in market dynamics as implied volatilities declined across various asset types. Interest rates led this move with VIXTLT plummeting nearly 20 points, settling at 125 basis points. This decline occurred as bond yields softened. Notably, the VIX index’s decrease was much more pronounced compared to the rally seen in the SPX spot, which contributed to less than half of the VIX’s movement. Investors should keep an eye on these changes as they indicate market sentiment and potential trading opportunities.