mumbai, July 4 -- Markets are back in calm waters, with the benchmark Nifty 50 rising nearly 4% in the month to date. However, an undercurrent has already started forming. Volatility could resurface soon, as US President Donald Trump hasn't shown any signs of extending his 90-day pause on reciprocal tariffs beyond 9 July. "Traders may start reacting as early as Friday, with increased activity in the Vix," said Shrikant Chouhan, head of equity research at stockbroker Kotak Securities. "Unless there is a delay or reversal in the tariff decision, volatility could spike, potentially reaching levels around 19-20," he added. The tariff pause had given markets around the world a chance to breathe easy. In fact, India's Volatility Index (Vix)-fear gauge-declined from a high of 22.79 on 7 April, the month when Trump first announced reciprocal tariffs, to around 12.44 on Thursday. Fear seems to have taken the back seat, with investors showing little concern over near-term uncertainties. According to market experts, most potential shocks, from geopolitical tensions and tariff worries to central bank decisions and major policy or election events, appear to be priced in. "This steep drop suggests that markets may not be pricing in the current geopolitical stress as highly volatile," said Vinay Jaising, chief investment officer and head of equity advisory at wealth manager ASK Private Wealth. Markets constantly try to price in upcoming changes, which naturally creates some uncertainty and results in volatility. When the outlook is unclear, investors brace for a range of outcomes, including worst-case scenarios. But as soon as signs of stability or clarity emerge, those fears begin to recede and markets tend to settle, said Nimesh Chandan, chief investment officer, Bajaj Finserv Asset Management Ltd. "When tariffs were first announced, markets reacted sharply and turned volatile. But now, with reports of the Indian government engaging with the US on a potential trade agreement, that anxiety has eased. And investors feel that the worst-case outcome may not materialize, and that is reflected in a falling VIX and rising markets," Chandan added. Interestingly, the trend isn't limited to India, he pointed out. The CBOE Volatility Index-Wall Street's "fear gauge"-which surged to 51 on 8 April, has also cooled off significantly, now sitting comfortably below the 20 mark, Jaising added. The index closed at 16.56, down 0.3%, on Wednesday. The CBOE Volatility Index, run by the Chicago Board Options Exchange, is based on S&P 500 index options and serves as a key barometer of expected volatility in the US equity market....