The S&P 500 closed at another record high on Monday, but Polymarket traders are positioning for a weaker start on Tuesday as investors await a key inflation reading and monitor renewed tensions between the U.S. and Iran.
The benchmark index rose 0.19% to finish at 7,412.84, marking another all-time closing high. However, the May 12 Polymarket contract implied only a 20% probability that the S&P 500 would open higher on Tuesday morning.
Why That Number Matters
Investor attention is firmly on April’s consumer price index report due Tuesday morning. The Cleveland Fed’s inflation nowcasting model projects the April Consumer Price Index print at 0.45% month-over-month for headline and 0.21% for core, lifting the annual headline rate to 3.56% from 3.30% in March.
That would represent the highest print since September 2023. The consensus on Wall Street sits at 3.7% for headline and 2.7% for core, versus 3.3% and 2.6% in March. The monthly consensus is 0.6% headline and 0.4% core.
Markets are also keeping a close watch on developments in the Middle East after President Donald Trump criticized Iran’s latest proposal to end the war.
“I would call it the weakest right now,” Trump said on Monday after rejecting Tehran’s counteroffer, which reportedly included demands for reparations, sanctions relief and full sovereignty over the Strait of Hormuz.
The Bull Countercase
Despite geopolitical uncertainty and rising energy prices, technology shares continued to underpin the broader market rally. Shares of Micron Technology (NYSE:MU) jumped 6.5% on Monday as the memory chip rally continued, while Nvidia (NASDAQ:NVDA) gained nearly 2%.
Wall Street has remained resilient amid the Iran war, supported by strong corporate earnings and continued enthusiasm around artificial intelligence-linked investments.
Companies reporting earnings on Tuesday include Under Armour (NYSE:UAA), On Holding (NYSE:ONON), JD.com (NASDAQ:JD) and Oklo Inc (NYSE:OKLO)
S&P 500 futures were down 0.16% early Tuesday.
How The Previous Bet Played Out: The S&P 500 opened Monday at 7,385.31, below Friday’s close of 7,398.93, meaning the May 11 Polymarket bet resolved “Down.”
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