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Prediction markets agree with Wall Street on Trump’s first 100 days

President Trump has brought together views of two camps that don’t usually agree.

In recent weeks, Goldman Sachs, Morgan Stanley, UBS and other banks have raised their recession odds while cutting GDP forecasts.

Then on Tuesday, in a rare moment of consensus, prediction markets locked into the same outlook as the old guard. On the betting platforms Kalshi and Polymarket, odds for a US recession this year spiked to about 65% from 55% the day before.

Those hovered at about 18% prior to inauguration day.

Meanwhile, this week traders on both platforms also revised their forecast from positive to negative GDP for the first quarter, falling in line with major Wall Street firms, which have been warning of trade war risks and tariff-fueled front-loading of imports:

Those forecasts, while negative, are not as downbeat as the much-cited Atlanta Fed’s GDP projection for -2.5%, as the chart below shows.

If US GDP does indeed come in negative, it would be the first official contraction since the second quarter of 2022.

The sudden alignment between institutional models and crowd-based bets mark a sharp turn in the macro narrative. It’s rare for markets, models, and wagers to point in the same direction, particularly in such a rapid-fire news cycle.

Stocks, for their part, have made themselves clear.

The Dow Jones Industrial Average is down 6.8% since Trump 2.0 began, the worst start to a presidency since Nixon in 1973.

The S&P 500 and Nasdaq Composite have dropped 7.3% and 11%, respectively, each enduring similar historically-weak stretches.

“Trump’s first 100 days reek of stagflation and/or tech bust,” strategists at BCA Research wrote in a note to clients.

At the center of the turmoil, of course, sits Trump’s trade agenda. The White House has targeted more than 90 countries with varying degrees of tariffs in a start-and-stop fashion.

Although cabinet members Scott Bessent and Howard Lutnick hinted at forthcoming trade deals on Tuesday, clarity is far from a sure thing.

The uncertainty distorts supply chains and inflates costs, while paralyzing companies’ ability to issue earnings guidance or make hiring plans.

The Federal Reserve, too, remains reluctant to take action with rate cuts, as Opening Bell Daily covered Tuesday.

“If other countries do not give Trump the ability to backtrack in the short run, then global financial markets and the economy will crash,” BCA strategists said. 

Banks and economists often share a consensus, and many market-watchers dismiss them as noise for that reason. But when prediction markets and other new-age indicators begin to align with the old guard, noise starts to look a lot like signal.

Market snapshot

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Elsewhere

📦️ Amazon nearly went to battle with the White House. The company reportedly planned to list tariff prices for products on its site, but separate reports said President Trump called Jeff Bezos for the retailer to scrap the idea. White House officials had called the initial news “hostile and political.” (CNBC)

🚗 GM delayed its earnings call and suspended guidance. The stock dropped Tuesday even as the automaker reported better-than-expected first-quarter earnings. The company said its results benefited from customers’ pull-ahead demand trying to get ahead of potential tariffs. (Barron’s)

👀 Meta reports earnings today. The first-quarter results follow its release of a new app to rival ChatGPT, and investors will be listening for updates on AI spending and potential tariff disruptions. Wall Street expects earnings of $5.25 a share on revenue of $41.3 billion. (Yahoo Finance)

Rapid-fire

Last thing

About me

📰 I’m Phil Rosen, co-founder and editor-in-chief of Opening Bell Daily. I’ve published books, lived on three continents, and won awards for my journalism, which has appeared in Business Insider, Fortune, Yahoo Finance, Bloomberg and Inc. Magazine.

I write our flagship newsletter to prepare you for each trading day, unpacking markets, economic data and Wall Street with analysis you won’t find anywhere else. Feedback? Reply to this email, ping me on X @philrosenn, or write me directly at phil@openingbellmedia.com.