The S&P 500 gained 0.38% to close at 7,572.40 on Wednesday, bolstered by fresh signs of easing inflation and upbeat corporate earnings. Despite the rally, traders on Polymarket are growing cautious about Thursday's open, with the July 16 contract implying only a 37% probability that the index would open higher. The odds for a positive open steadily declined throughout Wednesday's trading session.

Inflation Data Supports Rally

An encouraging inflation report reinforced hopes that price pressures are gradually easing. The producer price index unexpectedly fell 0.3% in June, following a softer-than-expected consumer inflation report released on Tuesday. These back-to-back data releases strengthened expectations that the Federal Reserve could leave interest rates unchanged in the near term, even as markets continue to price in a chance of a hike later in the year.

Market Drivers and Outlook

Cooling inflation, easing Treasury yields, and strong earnings helped extend the market's rally. Major technology stocks led the gains, with Apple hitting a record high, while Amazon, Microsoft, and Alphabet each climbed around 3%. However, investors remain cautious that the Federal Reserve's inflation fight is not over. While June's producer prices surprised to the downside, the annual PPI still stood at 5.5%, and strategists warned that markets may be reacting too aggressively to individual reports.

Key Events to Watch

Attention now turns to several critical economic data points and corporate earnings that could shape expectations for the second half of the year. Upcoming events include:

• June retail sales data
• Weekly jobless claims
• UnitedHealth earnings before the bell
• Netflix quarterly results after the close

S&P 500 futures were down 0.1% early Thursday. The previous day's July 15 Polymarket contract resolved "Up" as the index opened at 7,571.72, above Tuesday's close of 7,543.59, with approximately $71,002 in traded volume.