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The S&P 500 slipped from record levels on Tuesday as rising oil prices and sticky inflation concerns pressured technology shares, but Polymarket traders are betting the benchmark index will rebound at Wednesday's open.
The S&P 500 closed 0.16% lower at 7,400.96 after touching fresh highs earlier this week. However, a May 13 contract on Polymarket showed an 83% chance that the index would open higher on Wednesday.
Investor focus has shifted toward inflation after April consumer prices rose at the fastest annual pace in nearly three years.
Markets are now awaiting April's producer price index data due Wednesday morning, with economists polled by Dow Jones expecting headline monthly inflation of 0.5%.
At the same time, geopolitical tensions remain elevated after President Donald Trump called the month-old ceasefire between the U.S. and Iran "unbelievably weak" and "on massive life support."
Oil prices extended gains Tuesday, with West Texas Intermediate (WTI) crude settling up 4.19% and Brent crude rising 3.42%. WTI crude and Brent futures were, however, trading slightly lower early Wednesday.
Despite Tuesday's pullback, investors continue to view artificial intelligence spending and strong earnings momentum as major supports for equities.
Market strategists have increasingly pointed to infrastructure, energy security and AI-linked capital expenditure as long-term themes likely to continue driving corporate profits higher. However, analysts have also warned that persistently high energy prices could further pressure consumers and complicate the inflation outlook if tensions in the Middle East remain unresolved.
Companies reporting earnings on Wednesday include Cisco (CSCO), Birkenstock (BIRK) and Alibaba (BABA).
S&P 500 futures were modestly higher early Wednesday, rising 0.1% ahead of another closely watched inflation report.
How The Previous Bet Played Out: The S&P 500 opened Tuesday at 7,390.63, below Monday's close of 7,412.84, meaning the May 12 Polymarket bet resolved "Down." The contract saw traded volumes of approximately $136,917 before settling.
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