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The S&P 500 slipped for a second straight session on Monday, dragged down by weakness in AI-linked tech stocks, and if you ask the crowd on Polymarket, the benchmark index is more likely to open lower again on Tuesday.
The May 19 contract on the prediction market implies just a 40% probability that the S&P 500 will open in the green. That's a bearish signal after Monday's 0.07% decline to 7,403.05 — a small move, but one that snapped the index's recent winning streak.
Monday's selloff came after a record-setting rally that pushed both the S&P 500 and the Nasdaq Composite to all-time highs last week. The culprit? A fresh dose of reality about the limits of the AI boom.
At a JPMorgan conference, Seagate (STX) CEO Dave Mosley warned that expanding manufacturing capacity to meet surging AI-driven demand "would just take too long." That comment hit the semiconductor and memory-chip ecosystem hard. Seagate shares plunged nearly 7%, dragging down peers and reigniting concerns about supply constraints in the AI supply chain.
Investors are also keeping an eye on geopolitics. President Donald Trump said Monday he was calling off a planned attack on Iran after requests from regional leaders to "hold off." That de-escalation helped calm nerves, but the market's focus remains on earnings and economic data.
Despite the recent wobble, Wall Street is still near record levels, supported by a powerful earnings-driven rally. And the Middle East situation, while fluid, hasn't escalated as some feared.
Before Tuesday's opening bell, all eyes will be on Home Depot (HD) earnings and April pending home sales data. S&P 500 futures were down 0.23% in early trading, suggesting a cautious open.
How the previous bet played out: The S&P 500 opened Monday at 7,415.07, above Friday's close of 7,408.50, so the May 18 Polymarket contract resolved "Up." Traders will find out soon enough whether Tuesday follows a different script.
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