Wall Street’s Volatility Index, or VIX, extended Thursday gains this morning, rising 5.4% to 32.89 points after Friday’s economic report indicated strong job numbers and elevated wage growth.

Analysts say the report gives the Federal Reserve green light to raise interest rates by 0.50 percentage point to tame four-decade highs in inflation, partly driven by a tight labor market and rising wages. That could further lead to jitters in the market, dragging down highflying tech stocks even more.

The stock market on Thursday swung wildly, with the Dow Jones Industrial Average posting its largest decline this year just a day after its largest gain since 2020, contributing to a murky outlook for investors. Analysts, however, note that despite the stock market volatility in recent days, VIX is still 9.8% below its 2022 March highs.

“This suggests that investors believe an even deeper selloff may occur over the coming months with the Fed expected to once again raise interest rates by 50 basis points at the June meeting,” said Robert Schein, chief investment officer at Blanke Schein Wealth Management, in a note. “If investors truly believed the bottom was near, we would likely see an even higher VIX.”

Mr. Schein recommends investors to prepare for sideways trading in the near future, especially as the market remains divided on whether the bottom is here.