The S&P 500 fell on Tuesday as weakness in semiconductor stocks continued and investors weighed geopolitical uncertainty in the Middle East. Polymarket traders are now betting the benchmark index will open lower on Wednesday.
The S&P 500 declined 0.26% to close at 7,386.65 on Tuesday after giving up early gains. The June 10 Polymarket contract implied just a 22% probability that the index will open higher on Wednesday, signaling a strongly bearish outlook among traders.
Why That Number Matters
Markets are facing a combination of rising geopolitical tensions and inflation concerns.
The U.S. launched “self-defense strikes” against Iran late Tuesday after Washington accused Tehran of shooting down a U.S. Army Apache helicopter over the Strait of Hormuz. The latest escalation threatens the fragile ceasefire between the two countries. It could complicate efforts toward a broader peace agreement, as Iran retaliated to the strikes, targeting U.S. sites in Jordan, Bahrain and Kuwait.
Investors are also awaiting May’s consumer price index report due Wednesday morning. Economists surveyed by Dow Jones expect annual inflation to accelerate to 4.2%, marking the first reading above 4% since May 2023.
Oil prices moved higher following the latest developments, with West Texas Intermediate crude futures rising around 1% in overnight trading.
The Bull Countercase
Despite recent volatility, the broader market remains supported by resilient economic data and optimism that tensions in the Middle East can eventually be contained.
On Tuesday, President Donald Trump said a deal with Iran could be reached within “two or three days” that would reopen the Strait of Hormuz, helping ease concerns over global energy supplies.
Materials, consumer discretionary and real estate stocks outperformed during Tuesday’s session, suggesting investors are rotating into areas that could benefit if energy prices stabilize and economic growth remains intact.
S&P 500 futures were down 0.47% early Wednesday.
How The Previous Bet Played Out: The S&P 500 opened Tuesday at 7,438.66, above Monday’s close of 7,405.73, meaning the June 9 Polymarket bet resolved “Up.” The contract recorded about $87,405 in traded volume before settling.
Image via Shutterstock
Recent Comments