The S&P 500 took a small hit Tuesday, slipping 0.57% to close at 7,511.35 as investors shuffled out of chip stocks and into more cyclical names. But if you ask the crowd on Polymarket, that dip is just a blip. The prediction market's June 17 contract is pricing in a 78% chance the index opens higher on Wednesday.
That optimism isn't coming out of nowhere. Wednesday is a big day for markets, with the Federal Open Market Committee meeting wrapping up—the first under new Fed Chair Kevin Warsh. Nobody expects the Fed to move rates, which are sitting at 3.5% to 3.75%, but traders will be parsing every word of the economic projections and commentary for hints about what comes next in the second half of the year.
Meanwhile, geopolitics are providing a tailwind. The U.S. and Iran recently struck a deal to end their conflict and reopen the Strait of Hormuz, which has helped ease Middle East tensions and pushed oil prices lower. Lower energy costs are a nice boost for an economy that's still chugging along, and that's got equity bulls feeling good.
On the data front, investors are watching for May retail sales and pending home sales figures. And before the opening bell, CarMax (CarMax (KMX)) will report earnings, giving a peek into the health of the used car market.
S&P 500 futures were already pointing higher early Wednesday, up 0.28%. That's consistent with the Polymarket bet, which has about $133,752 in volume riding on it. For context, Tuesday's contract resolved "Down" after the index opened at 7,548.78, below Monday's close of 7,554.29. So the crowd got that one wrong. But they're betting on a rebound today.
Whether the Fed delivers the goods or not, Wednesday's open will tell us if the Polymarket crowd is right this time.
