The S&P 500 had a rough Monday, dragged down by a broad rotation out of big tech stocks. And if you ask the crowd on Polymarket, Tuesday's open isn't looking much better.

The index closed at 7,472.79, down 0.37% from the previous session. The prediction market's contract for the June 23 open is pricing in just a 2% chance that the S&P 500 opens higher. That's about as bearish as it gets.

To put that in perspective: on Monday morning, the same contract showed more than 80% odds of an "Up" open about an hour before the bell. Then sentiment flipped, the market opened down, and the contract resolved "Down" after $68,664 in trading volume. Tuesday's 2% probability suggests traders think Monday's weakness has legs.

What's Driving the Fear

A few big things are weighing on sentiment. First, last week's Federal Reserve meeting came off as more hawkish than expected, keeping the focus on inflation and interest rates. Markets are still digesting what that means for the rest of the year.

Second, there's some geopolitical progress: mediators Qatar and Pakistan said the U.S. and Iran have agreed on a roadmap toward a final deal within 60 days. That helped push oil prices lower, which is usually good for stocks, but it's not enough to offset the tech selloff.

And third, everyone is waiting for Thursday's release of the personal consumption expenditures (PCE) index — the Fed's preferred inflation gauge. If that number comes in hot, it could reignite fears that the Fed might need to raise rates later this year.

The Tech Wreck

Technology stocks took the brunt of Monday's selling. Alphabet (GOOGL) and Alphabet (GOOG) fell 5% on concerns about artificial intelligence talent departures. Amazon (AMZN), Meta Platforms (META), and Microsoft (MSFT) also posted notable losses.

But the biggest loser was SpaceX (SPCX), which dropped 16% and recorded its third consecutive losing session. That's a sharp reversal for a stock that had been one of the market's biggest winners, and it's adding to concerns that investors are getting cautious about high-flying names.

Some strategists still point to resilient corporate earnings and solid economic fundamentals as reasons to stay bullish. But for now, the momentum is clearly on the side of the bears.

What to Watch Tuesday

Traders will be keeping an eye on earnings from Carnival (CCL) and the preliminary June S&P Global manufacturing and services PMI data. Both could provide clues about the health of the economy and consumer spending.

S&P 500 futures were down 1.43% as of late Monday, suggesting the weakness is carrying over. If the Polymarket contract is any guide, Tuesday's open could be another down day.

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