The S&P 500 has been on a losing streak — three straight sessions of red — but if you ask the crowd on Polymarket, the benchmark index is likely to snap that streak at Wednesday's open. The prediction market's May 20 contract implies a 71% chance the index opens higher, even as bond yields keep climbing and investors hold their breath for Nvidia (NVDA)'s earnings.
The S&P 500 fell 0.67% on Tuesday to close at 7,353.61. That followed Monday's drop and Friday's decline. But Polymarket bettors are looking past the recent weakness, at least for the open. The contract, which resolves based on whether the index opens above Tuesday's close, has attracted attention as a real-time sentiment gauge.
Why That Number Matters
The bullish bet on the open comes against a backdrop of rising bond yields that have been rattling equities. On Tuesday, the 30-year Treasury yield briefly topped 5.19% — its highest level in nearly 19 years. The benchmark 10-year yield climbed as high as 4.687%, a level not seen since January 2025. A series of economic reports suggesting inflation may be reaccelerating has driven the move.
Investors are also bracing for Nvidia's first-quarter earnings report, due after Wednesday's closing bell. The chipmaker's results have become a bellwether for the AI trade, and any disappointment could ripple through the market. The Federal Reserve's April meeting minutes, also due Wednesday afternoon, could provide clues on policymakers' inflation outlook. And later this week, Kevin Warsh is set to be sworn in as Fed chair, adding another layer of uncertainty.
Ipek Ozkardeskaya, senior analyst at Swissquote, highlighted another pressure point: "Traffic through the Strait of Hormuz remains at a near standstill, world oil inventories continue tightening, and oil prices keep rising. The latter fuels global inflation expectations and pushes global yields higher on rising bets that central banks may have to fight price pressures despite the worsening economic outlook."
The Bull Case
Despite the recent pullback, many investors still see artificial intelligence spending and earnings growth as powerful drivers for the broader market. S&P 500 futures were up 0.21% in early trading Wednesday, suggesting some optimism.
Before the open, investors will also digest earnings from a handful of major companies: Lowe's (LOW), Target (TGT), Hasbro (HAS), Analog Devices (ADI), and TJX (TJX). Their results could offer clues on consumer health and corporate spending.
How the previous bet played out: The S&P 500 opened Tuesday at 7,375.75, below Monday's close of 7,403.05, meaning the May 19 Polymarket contract resolved "Down." That contract saw traded volumes of approximately $93,868 before settling. Wednesday's contract will be watched closely as a test of whether the market's short-term pessimism is overdone.
