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Wall Street's fear gauge may not be so scary if you have an eye toward long-term investing.

A key market fear indicator, the CBOE Volatility Index ( ^VIX ), recently had its biggest three-day spike of the year, according to date from Creative Planning chief markets strategist Charlie Bilello. The VIX hit its 2025 high of 46.98 on April 7 as Trump tariff fears rippled through global markets .

The three-day spike in the VIX from April 4 to April 7 tallied 118%, making it the fifth-largest spike going back to 2014, per Bilello's data.

Interestingly, while traders often use the VIX as a short-term broader market fear gauge, the index's extreme levels historically have been a bullish long-term indicator for stocks.

After three-day VIX spikes since 2014 ranging from 63% to 176%, Bilello has found the average one-year return for the S&P 500 ( ^GSPC ) has totaled about 4.4%. Five years after the VIX spike, the S&P 500 has averaged a 10.2% return.

"High volatility/fear = opportunity," Bilello said on X in an attempt to explain the bullishness tied to an often bearish market measure.

The VIX currently stands at 40. Consistent with Bilello's data, buyers have started to emerge in the beat-up stock market.

The Dow Jones Industrial Average ( ^DJI ) popped 3.4%, adding over 1,300 points at the open, as traders lock in on the Trump administration reportedly beginning trade discussions with Japan and other countries. Sharp gains are also being seen on the S&P 500 ( ^GSPC ) and Nasdaq Composite ( ^IXIC ).

The news is being seen as a sign Trump’s broad tariffs — which are set to kick in on Wednesday — will prove to be a negotiating tactic.

Read more: The latest news and updates on Trump's tariffs

China, however, vowed today to quote “fight to the end” on the tariff front.

"Trump telling allies Monday that the tariff end game is coming sooner than people expect, with trade deals to be negotiated, seems like the main driver of the bounce in markets overnight beyond just oversold conditions," 22V Research founder Dennis DeBusschere wrote in a note. "We get it, China news could get very scary over the next few days. We DON’T have an all clear."

DeBusschere added, "In short, the upshot of shooting yourself in the foot, economically speaking, is that despite the damage or uncertainty created, you don’t need to shoot yourself in the other foot."

Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on X @BrianSozzi , Instagram , and LinkedIn