The S&P 500 had a monster Monday. After President Donald Trump announced a deal to end the war between the U.S. and Iran, the benchmark index jumped 1.65% to close at 7,554.29 — its strongest daily gain in weeks. Falling oil prices and easing geopolitical tensions gave risk assets a shot of adrenaline.
But if you think that means everyone is confident about Tuesday's open, think again. On Polymarket, the prediction market where traders bet on whether the S&P 500 will open higher or lower, the June 16 contract is pricing in just a 52% probability of an up open. That's basically a coin flip.
Why That Number Matters
Monday's rally was all about the peace deal. According to Pakistani Prime Minister Shehbaz Sharif, both the U.S. and Iran have agreed to terminate military operations, with a formal signing ceremony scheduled for Friday in Switzerland. The agreement is expected to reopen the Strait of Hormuz on Friday, which helped drive oil prices nearly 5% lower on Monday. That's a big deal for inflation — and for the Federal Reserve, which is meeting this week.
Investors will also be watching May housing starts and import/export price data due Tuesday for clues on where the economy is headed.
The Bull Case
The prospect of a lasting peace agreement has improved the outlook for energy prices, inflation, and economic growth. Monday's rally was broad-based: the Dow Jones Industrial Average hit a new record close, and the Nasdaq posted its best day since March 31. SpaceX (SPCX) shares also gained nearly 20%, extending the strong momentum from Friday's historic IPO debut.
Still, S&P 500 futures trading was largely flat overnight. That suggests traders are waiting for additional confirmation that the Iran agreement will proceed as planned and that the reopening of the Strait of Hormuz happens without a hitch.
How The Previous Bet Played Out: The S&P 500 opened Monday at 7,516.75, above Friday's close of 7,431.46, meaning the June 15 Polymarket bet resolved "Up." The contract recorded about $22,933 in traded volume before settling.
