Tuesday was a good day for the stock market. The S&P 500 surged to a fresh record close, powered by strong corporate earnings, falling oil prices, and optimism that the U.S. and Iran might actually work something out. Now, the question on everyone's mind is: can it keep going?
According to traders on Polymarket, the answer is a confident yes. The Aug. 5 contract on the prediction market platform implies an 87% probability that the index will open higher on Wednesday. That's a pretty strong conviction, especially after a day like Tuesday.
Why That Number Matters
Tuesday's rally pushed the S&P 500 above the 7,700 level for the first time ever, with both the benchmark index and the Dow Jones Industrial Average notching fresh record closes. This wasn't just a Big Tech show. Industrials, financials, and materials all posted solid gains, while AI-linked companies continued to impress. According to FactSet data, more than 84% of S&P 500 companies reporting second-quarter results have beaten analysts' earnings expectations so far, which is a pretty strong vote of confidence in corporate America.
Oil prices also tumbled after Treasury Secretary Scott Bessent said the U.S. was in talks with Iran and that an agreement to reopen the Strait of Hormuz could come "today or tomorrow." That's a big deal because it could ease supply disruptions and inflation pressures, which have been nagging the market for a while.
The Market Case
So, what's driving all this optimism? Two powerful catalysts: improving earnings and easing geopolitical tensions. Corporate results have been reassuring investors across the board. Caterpillar Caterpillar (CAT) raised its revenue outlook after reporting strong demand tied to AI data center construction, while Palantir Technologies Palantir Technologies (PLTR) surged nearly 30% after reporting blowout results.
But here's the thing: investors won't have much time to celebrate. Another wave of earnings and economic data is set to test the rally. Advanced Micro Devices Advanced Micro Devices (AMD) fell about 8% in after-hours trading after delivering only a modest earnings beat, while SpaceX SpaceX (SPCX) dropped nearly 7% after reporting a sharp increase in second-quarter capital expenditures.
Wednesday also brings the ADP private payrolls report, ISM non-manufacturing data, and earnings from Disney Disney (DIS), Uber Uber (UBER) and Eli Lilly Eli Lilly (LLY). So there's plenty of potential for the market to move, in either direction.
S&P 500 futures added 0.39% early Wednesday, suggesting the market is leaning toward the optimistic side. But let's not get ahead of ourselves.
How The Previous Bet Played Out
For those keeping score at home, the Aug. 4 Polymarket contract attracted approximately $13,449 in trading volume, a sharp decline from Monday's unusually heavy activity as market volatility eased following optimism over renewed U.S.-Iran diplomacy. The S&P 500 opened at 7,630.62, above Monday's close of 7,600.50, meaning the contract ultimately resolved "Up." So the prediction market has been right so far. Will it be right again? We'll find out soon enough.
