Which matters more to stocks: the bond market or AI risks? The volatility gauge might offer an answer

When it comes to two of the main threats to the U.S. stock market right now, traders in the options pits are making it clear which boogeyman is scarier and and potentially more disruptive to the AI trade.Volatility measured by the Cboe VIX Index jumped to 18 Monday and options trading on the gauge surged to more than double the 30-day average volume as semiconductors and data-center stocks dragged on the S&P 500 Index. Their poor action followed a renewed debate among tech leaders and politicians over whether the artificial intelligence buildout is happening too fast.By midday, three of the top five VIX contracts to buy were calls, and the biggest trade of the day was someone purchasing at least $3.6 million of the 31-strike calls expiring mid-November.Stock Chart IconStock chart iconCboe Volatility Index, YTDIt was close to the opposite on Friday, when the 'VIX' erased two days of gains despite inflation data that sent the odds of an interest-rate hike by the Federal Reserve at this week's meeting to 90%. By the close on Friday, options on the S&P 500 were pricing a swing of 0.8% into weekly contracts expiring Sep. 18, below the 50th percentile of volatility expected for w...