The S&P 500 closed above the 7,500 level for the first time on Thursday, but Polymarket traders are overwhelmingly betting the benchmark index will open lower on Friday as investors digest stretched valuations, AI-driven market concentration and developments from the ongoing U.S.-China summit.
The S&P 500 rose 0.77% to finish at a record 7,501.24 on Thursday. However, the May 15 Polymarket contract implied a 99% probability that the benchmark index would open lower on Friday.
Why That Number Matters
Thursday's close marked another milestone in the market's AI-fueled rally, with the benchmark index extending gains even as investors continued monitoring tensions involving Iran and the Strait of Hormuz.
Markets also tracked developments from the U.S.-China summit, where officials discussed trade, tariffs, Taiwan and Iran.
Meanwhile, some investors have grown cautious about the increasingly narrow nature of the rally, with technology megacaps continuing to account for a disproportionate share of market gains.
The Bull Countercase
Strong corporate earnings and continued enthusiasm around artificial intelligence remained key supports for equities.
Shares of Cisco Systems (NASDAQ:CSCO) surged over 13% on Thursday after the company posted stronger-than-expected quarterly results and announced job cuts. NVIDIA also gained more than 4% after Reuters reported the U.S. had cleared several Chinese firms to purchase its H200 chips.
Still, strategists have warned that the market's advance is becoming increasingly dependent on a handful of technology stocks.
"That broadening trade has really fizzled out," Keith Lerner, investment chief at Truist Advisory Services, told CNBC's "Closing Bell: Overtime."
Investors also remain alert to geopolitical risks tied to Iran and elevated oil prices, which could reignite inflation concerns and pressure broader market sentiment.
S&P 500 futures were down 0.37% early Friday. The index is headed for its seventh straight week of gains.
How The Previous Bet Played Out: The S&P 500 opened Thursday at 7,454.40, above Wednesday's close of 7,444.25, meaning the May 14 Polymarket bet resolved "Up." The contract recorded traded volumes of approximately $146,284 before settling.
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