The coming week poses a critical test for the stock market's record-setting run with a number of make-or-break events — the Federal Reserve 's rate decision, July jobs report and President Donald Trump's tariffs deadline. Popular wagers on prediction platforms Kalshi and Polymarket offer an alternative view into how the mainstream thinks things will unfold next week. These markets became established in the run-up to the 2024 presidential election and have been widely used by investors and even Wall Street strategists to gauge the consensus crowd view of a certain event. The S & P 500 has rebounded more than 30% off its low on April 7, reaching consecutive record highs this week after the benchmark closed above 6,300 for the first time. Investors have cheered resilient economic growth and corporate profits even in the face of higher tariffs. Still, next week marks a wild card that could easily derail the bull run. Fed meeting Consistent with the pricing in the futures markets, prediction platform Kalshi is assigning virtually no chance for a rate cut when the Fed meets next week. But the prediction markets do anticipate some drama during the Fed meeting with Powell perhaps losing his grip on the consensus of his peers. Kalshi is pricing in a 82% chance of a dissenting vote against a no-cut decision. Notably, Fed Governors Michelle Bowman and Christopher Waller have said they would favor a rate cut in July so long as inflation pressures stay muted. So they could be the two that emerge. Fed Chairman Powell and his fellow policymakers have been reluctant to lower rates as they wait to see the impact that Trump's tariffs have on inflation. Powell has also argued that the economy is strong enough that it can withstand higher rates as officials watch how the data evolves. Powell is likely to address the dramatic meeting with Trump this week about the Fed's building renovation during his press conference following the decision. Traders on the prediction markets are also placing bets on random words that may be uttered by the Fed chief. These words include "credit," "projection" and "median." Jobs report July jobs report next Friday will offer a fresh look at the health of the labor market that has been resilient in the face of Trump's tariffs. Kalshi traders expect a solid jobs report in the Goldilocks range. Kalshi is pricing in a 79% chance that the payroll number will be higher than 100,000, but just an 18% chance that it will be higher than 150,000. The jobless rate has been assigned a 55% likelihood to be above 4.1%. For context, economists polled by FactSet expect that the U.S. economy will have added 115,000 jobs in July, down from 147,000 in June. The unemployment rate is expected to have edged up to 4.2% from 4.1% previously. Aug. 1 tariff deadline The world is bracing for more erratic trade headlines as the Aug. 1 deadline approaches. Trump said Friday there is a 50-50 chance that the U.S. would reach a trade agreement with the European Union. European Commission President Ursula von der Leyen posted on X later Friday that she and Trump have agreed to meet in Scotland on Sunday to discuss trade. The EU is preparing countermeasures in case of a no-deal scenario . The prediction market is pricing in a 53% likelihood of a deal with the EU. As for China, which faces an Aug. 12 deadline to reach a deal, Polymarket assigns an 83% chance that the two countries will come to an agreement.
