The S&P 500 climbed for a second straight session on Wednesday as fresh signs of easing inflation and upbeat corporate earnings supported equities. However, Polymarket traders are growing more cautious about Thursday’s open.

The S&P 500 gained 0.38% to close at 7,572.40. However, the July 16 Polymarket contract implied just a 37% probability that the index would open higher on Thursday, with odds steadily declining throughout Wednesday’s trading.

Why That Number Matters

Another encouraging inflation report reinforced hopes that price pressures are gradually easing.

The producer price index unexpectedly fell 0.3% in June, following Tuesday’s softer-than-expected consumer inflation report. The back-to-back data releases strengthened expectations that the Federal Reserve could leave interest rates unchanged in the near term, even though markets continue to price in a meaningful chance of a hike later this year.

Attention now turns to June retail sales, weekly jobless claims, UnitedHealth’s (NYSE:UNH) earnings before the bell and Netflix’s (NASDAQ:NFLX) quarterly results after the close, all of which could shape expectations for economic growth and corporate earnings heading into the second half of the year.

The Outlook

Cooling inflation, easing Treasury yields and another round of strong earnings helped extend the market’s rally. Major technology stocks led Wednesday’s gains, with Apple (NASDAQ:AAPL) hitting a record high while Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) each climbed around 3%.

However, despite improving inflation data, investors remain cautious that the Federal Reserve’s inflation fight is not over.

While June’s producer prices surprised to the downside, annual PPI still stood at 5.5%, and several strategists warned markets may be reacting too aggressively to individual inflation reports.

S&P 500 futures were down 0.1% early Thursday.

How The Previous Bet Played Out: The S&P 500 opened Wednesday at 7,571.72, above Tuesday’s close of 7,543.59, meaning the July 15 Polymarket contract resolved “Up.” The contract recorded approximately $71,002 in traded volume before settling.

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