The S&P 500 closed just above the flatline on Monday after a volatile session as U.S. stocks clawed back early losses following weekend air strikes on Iran. Tech and defense stocks supported the market while airline and cruise names lagged, reflecting rising oil costs and risk-off sentiment.
On Polygon-based (CRYPTO: POL) Polymarket, traders are heavily leaning toward a down open on Tuesday, with the market pricing the S&P 500 to open lower at 93% “Down” versus 7% “Up,” on roughly $28,200 in volume.
Why That Number Matters
That bearish lean comes ahead of Wednesday’s economic data and ongoing unrest in the Middle East.
At last check, S&P 500 futures were at 6,838.50, down by 49.75 points or 0.72%.
The bigger driver, however, is oil. Crude prices surged amid investors’ concerns that the attacks could spiral into a broader war that disrupts supplies and has a knock-on effect on inflation. Iran is the fourth-largest oil producer in OPEC, and occupies a pivotal geographic position along the Strait of Hormuz — a narrow waterway through which roughly one-fifth of global oil consumption transits. Iran has closed the Strait of Hormuz and said it will fire on any ship trying to pass. Crude was up about 12% at its high on Monday.
Higher energy prices complicate the Federal Reserve’s path forward, particularly as markets have been pricing in potential rate cuts later this year.
The broader backdrop also reflects recent weakness. In February, the benchmark index fell 0.8% to close the month at 6,878.88, underscoring the fragile momentum heading into March.
The Bull Countercase
Despite the cautious positioning, Monday’s session showed that dip buyers have not disappeared.
Some strategists argue that unless energy prices remain elevated for a sustained period, the market may look through short-term geopolitical shocks.
Stephen Innes, Head of Trading and Market Strategy at SPI Asset Management, wrote that the market’s reaction reflects a repricing of risk tied to energy and time rather than outright panic, describing the tone as “seasoned behaviour rather than systemic stress.” He noted that buyers stepped in later in the session, a pattern that aligns with historical episodes where equities have stabilized once oil-driven volatility eases.
How The Previous Bet Played Out: The S&P 500 opened down on Monday by 54.52 points, and Polymarket punters called it correctly, with the “Down” outcome confirmed on over $1.7 million in trading volumes.
Image via Shutterstock
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