The S&P 500 surged to a fresh record close on Tuesday as strong corporate earnings, easing oil prices and optimism over a potential breakthrough between the U.S. and Iran fueled another broad-based rally. Polymarket traders are now overwhelmingly betting the benchmark will extend those gains at Wednesday’s open.
The S&P 500 rose 1.79% to close at 7,736.52, after opening at 7,630.62. The Aug. 5 Polymarket contract implied an 87% probability that the index will open higher on Wednesday.
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.
The advance was fueled by broad participation beyond Big Tech. 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, helping reinforce confidence in the strength of 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,” lifting hopes that supply disruptions and inflation pressures could ease.
The Market Case
Markets drew support from two powerful catalysts: improving earnings and easing geopolitical tensions.
Corporate results also continued to reassure investors. Caterpillar (NYSE:CAT) raised its revenue outlook after reporting strong demand tied to AI data center construction, while Palantir Technologies (NASDAQ:PLTR) surged nearly 30% after reporting blowout results.
However, investors will have little time to celebrate, with another wave of earnings and economic data set to test the rally.
Advanced Micro Devices (NASDAQ:AMD) fell about 8% in after-hours trading after delivering only a modest earnings beat, while SpaceX (NASDAQ: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 (NYSE:DIS), Uber (NYSE:UBER) and Eli Lilly (NYSE:LLY).
S&P 500 futures added 0.39% early Wednesday.
How The Previous Bet Played Out: 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.”
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