The S&P 500 ended higher on Tuesday after a softer-than-expected inflation report boosted hopes that the Federal Reserve may not need to tighten monetary policy as aggressively this year. Polymarket traders now expect the benchmark index to extend those gains at Wednesday’s open.
The S&P 500 rose 0.38% to close at 7,543.59. The July 15 Polymarket contract implied a 73% probability that the index will open higher on Wednesday.
Why That Number Matters
June’s consumer price index fell 0.4% from the previous month, while annual inflation slowed to 3.5%, below economists’ expectations of 3.8%.
The softer inflation reading prompted traders to sharply reduce expectations for an immediate Federal Reserve rate hike. According to CME FedWatch, the probability of a July hike fell to 17% from 42% a day earlier, although markets still see a meaningful chance of higher rates later this year.
