From Iran to Anthropic: What prediction markets are pricing in

Main U.S. indexes modestly red Energy leads S&P 500 sector gainers; Tech is weakest group Euro STOXX 600 index falls ~0.2% Dollar falls; bitcoin dips; U.S. crude, gold gain U.S. 10-year Treasury yield rises to ~4.68% Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at Looking ahead to the 2026 midterm elections: Participants strongly favor Democrats regaining control of the House, assigning roughly 88% odds to that outcome. The Senate race is much tighter, with both parties effectively locked in a toss-up. Finally, Anthropic: Prediction markets have largely moved beyond debating whether the AI startup will go public and are now focused on when. Odds of an IPO stand at 68% by the end of October and 82% by year-end, making a fall debut the market's base-case scenario. Taken together, Rabe says prediction markets are signaling persistent geopolitical risk, an uncertain Fed path, a likely shift in House control and growing confidence that an Anthropic IPO is approaching. Prediction markets are increasingly becoming a go-to tool for gauging event risk because participants are putting money behind their views, not just sharing opinions. In a note out Friday morning, DataTrek Research co-founder Jessica Rabe points to several notable signals emerging from Polymarket. First, the U.S.-Iran conflict: Participants are growing less confident that shipping through the Strait of Hormuz will return to normal anytime soon. Odds of normalization by year-end have fallen to 46% from as high as 91% earlier this summer, suggesting traders now see prolonged tensions as more likely than a return to normal conditions. The oil market appears to agree, Rabe says. WTI crude is holding above $81 a barrel, while futures prices point to elevated costs through year-end. She argues that sustained energy prices could fuel inflation and strengthen the case for additional Fed tightening. On the Fed: Polymarket assigns a 54% chance of a rate hike in 2026. Futures markets imply only modest odds of a quarter-point increase by year-end, but Rabe argues the bigger story is uncertainty. Investors appear split between two outcomes: no hikes at all or the start of a more traditional tightening cycle. She cautions that, historically, once the Fed starts raising rates, it rarely stops after a single move.

From Iran to Anthropic: What prediction markets are pricing in

Market snapshot

Politics and Anthropic

What prediction markets are pricing in

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