What is causing the markets to tumble and the VIX to spike as investor unease about high interest rates increases on Tuesday?

American stocks are experiencing significant declines during midday trading in New York, reflecting a negative trend seen in September historically. All major indices and sectors within the S&P 500 index are seeing decreases. The CBOE Volatility Index (VIX), also known as the “fear index,” has surged 9%, reaching its highest point since August 18. Investors are concerned that the Federal Reserve’s commitment to maintaining high-interest rates to combat inflation may slow down the economy and reduce corporate profits. The approaching October 1st deadline for a possible government shutdown is also contributing to unease. Treasury yields remain at levels not seen in over a decade. Minneapolis Fed President Neel Kashkari has indicated a 40% possibility of the Fed implementing significant rate hikes to counter inflationary pressures. In Tuesday’s trading, the S&P 500, Dow, Nasdaq 100, and Russell 2000 all experienced declines.