The S&P 500 posted its third straight losing session on Tuesday as surging Treasury yields pressured equities, but Polymarket traders are betting the benchmark index will rebound at Wednesday's open ahead of Nvidia's (NASDAQ:NVDA) closely watched earnings report.
The S&P 500 fell 0.67% to close at 7,353.61 on Tuesday. However, the May 20 Polymarket contract implied a 71% probability that the index would open higher on Wednesday.
Why That Number Matters
Markets are increasingly focused on rising bond yields after a series of economic reports suggested inflation may be reaccelerating.
On Tuesday, the 30-year Treasury yield briefly topped 5.19%, its highest level in nearly 19 years, while the benchmark 10-year yield climbed as high as 4.687%, reaching levels last seen in January 2025.
Investors are also awaiting Nvidia's first-quarter earnings report after Wednesday's closing bell.
The Federal Reserve's April meeting minutes, due Wednesday afternoon, could also provide clues on policymakers' inflation outlook ahead of Kevin Warsh's swearing-in as Fed chair later this week.
Ipek Ozkardeskaya, senior analyst at Swissquote, said: “Traffic through the Strait of Hormuz remains at a near standstill, world oil inventories continue tightening, and oil prices keep rising. The latter fuels global inflation expectations and pushes global yields higher on rising bets that central banks may have to fight price pressures despite the worsening economic outlook.”
The Bull Case
Despite the recent pullback, investors continue to view artificial intelligence spending and earnings growth as powerful drivers for the broader market.
Ahead of the opening bell, investors will also be watching earnings from Lowe's (NYSE:LOW), Target (NYSE:TGT), Hasbro (NASDAQ:HAS), Analog Devices (NASDAQ:ADI) and TJX (NYSE:TJX).
S&P 500 futures were up 0.21% in early trading.
How The Previous Bet Played Out: The S&P 500 opened Tuesday at 7,375.75, below Monday's close of 7,403.05, meaning the May 19 Polymarket bet resolved "Down." The contract recorded traded volumes of approximately $93,868 before settling.
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