The S&P 500 snapped a three-day losing streak on Wednesday, and if you ask the crowd on Polymarket, there's a good chance the good times continue at Thursday's open. The prediction market contract for the S&P 500 opening higher on May 21 implied a 66% probability as of Wednesday evening.
Wednesday was a solid day for stocks. The S&P 500 rose 1.08% to close at 7,432.97, while the Nasdaq Composite gained 1.54%. The rally was fueled by a couple of big macro tailwinds: oil prices plunged and Treasury yields pulled back from scary levels.
Why Oil and Yields Matter
The big catalyst was growing optimism that the conflict in the Middle East could be moving toward a resolution. President Donald Trump told reporters that the administration was in the "final stages" of negotiations with Iran. That sent oil prices into a tailspin — West Texas Intermediate crude fell 5.66%, and Brent crude dropped 5.63%. Lower oil prices are generally good for stocks because they reduce input costs for companies and ease inflation fears.
Treasury yields also retreated after spooking investors earlier in the week. The 10-year yield fell more than 9 basis points, while the 30-year yield dropped over 6 basis points after recently hitting its highest level since 2007. Lower yields make stocks more attractive relative to bonds.
Investors also had time to digest the minutes from the Federal Reserve's latest meeting. The minutes showed that most policymakers expect interest-rate hikes could become necessary if inflation stays elevated because of the Middle East conflict. That's a bit of a downer, but for now, the market is focused on the immediate good news.
The Nvidia Effect
Markets got another boost from Nvidia (NVDA)'s quarterly results. The chipmaker beat Wall Street expectations and raised guidance, reinforcing confidence in the artificial intelligence investment theme that has powered much of the market's gains. Nvidia shares traded modestly lower in after-hours trading as investors debated whether the results justified lofty expectations, but the overall message was positive.
What to Watch Thursday
Investors will also monitor earnings from Walmart (WMT) before the opening bell, alongside economic data on jobless claims, housing, and manufacturing activity. S&P 500 futures were up just 0.09% early Thursday, suggesting a cautious open.
For what it's worth, the previous Polymarket bet on the S&P 500 opening higher on Wednesday resolved "Up" — the index opened at 7,369.19, above Tuesday's close of 7,353.61. That contract saw traded volumes of about $63,587 before settling. Traders are betting history repeats itself.
