TLDR
- Polymarket bettors now see only a 24% chance of a U.S.-Iran ceasefire by March 31
- Over $12 million has been traded on Polymarket ceasefire contracts
- The Dow fell 0.6%, S&P 500 and Nasdaq each dropped around 0.3% on Thursday
- Oil prices surged, with WTI futures near $78 and Brent above $84 a barrel
- Concerns are growing that rising oil prices could force the Fed to reassess interest rates
As the U.S.-Israel coalition and Iran enter a sixth day of conflict, financial markets are feeling the pressure. Stocks dropped, oil prices climbed again, and prediction market bettors are not expecting a quick end to the fighting.
On Thursday morning, the Dow Jones Industrial Average fell 0.6%. The S&P 500 and the Nasdaq Composite each lost around 0.3%.
The drops came after markets failed to hold onto gains from a previous rebound session. Middle East conflict remains the main driver of market movement.
Trump said on Wednesday the U.S. was “doing very well on the war front.” The White House also said American forces had struck more than 2,000 targets and were working toward full control of Iranian airspace.
Iran is the fourth-largest oil producer in OPEC. Damage to its production infrastructure is pushing oil prices higher.
West Texas Intermediate futures traded near $78 a barrel. Brent crude climbed above $84.
Trump announced the U.S. would offer risk insurance and naval escorts for ships passing through the Strait of Hormuz. That eased some supply fears briefly, but damage to tankers and regional infrastructure kept pressure on prices.
Oil Prices Raise Fed Rate Concerns
Rising oil prices are adding a new layer of concern for investors. There is growing worry that sustained high energy costs could push the Federal Reserve to reconsider its interest rate stance.
This comes at a sensitive time, as Friday’s monthly jobs report is due. Investors will be watching closely for any signals about the health of the labor market.
On prediction markets, Polymarket data shows bettors now put the odds of a ceasefire by March 31 at just 24%. Shortly after the initial strikes on Saturday, that figure was above 60%.
The contracts fell as fighting continued and Trump said the military operation could last four to five weeks. The probability rises to 45% by the end of April, and above 60% by the end of May.
Polymarket Under Political Scrutiny
Ceasefire contracts on the platform have drawn over $12 million in total trading volume. Polymarket operates using cryptocurrency.
Democratic lawmakers have criticized Polymarket, saying war betting is inappropriate. They also raised concerns that government insiders could trade on classified information.
Earlier this week, Polymarket removed contracts on whether a nuclear weapon would detonate anywhere in the world. The removal came after those contracts drew public attention.
Polymarket has a data partnership with Dow Jones, the publisher of The Wall Street Journal.
