Remy Blaire: While it's lunchtime here in New York, it is 11 a.m. over in Chicago. So let's head on over to Cboe. FINTECH.TV correspondent Mark Payton is live from the Cboe trading floor.
Hey, Mark. What a week it has been. So here we are post-Fed, and we're looking at the major U.S. stock averages trying to partially recover from that selloff we saw yesterday.
So get us caught up on the trading action over at Cboe.
Mark Payton: Hey. Yeah, it's a much calmer picture here in Chicago today after yesterday's Fed-driven selloff.
Stocks are bouncing back pretty strongly. The S&P 500 is up about 1%. And one of the clearest signs of that change in tone is what we're seeing in volatility. The VIX is down about two points, trading around 15.7.
We're also getting some relief in the bond market. The 10 year Treasury yield has moved back below 5%, hovering around 4.95% after moving above that level yesterday.
And then there's oil. Really, one of the biggest moves we're watching is oil. Crude is falling sharply. It's down, you know, now as immediate supply concerns are starting to ease.
WTI is hovering right around 1% down, while Brent is down about 2.5%. So that's pretty interesting and something to take note of.
Part of what's driving that move is Saudi Arabia. They're offering additional crude through Oman, helping offset some of the disruption from the shutdown of that key East-West Pipeline.
And U.S. Energy Secretary Chris Wright says crude could be flowing through that pipeline again within days.
So, Remy, put it all together and we're seeing a much different tone today. Stocks are higher, volatility and Treasury yields are coming down, and oil is pulling back pretty sharply.
Remy Blaire: Yeah. And Mark, as you mentioned, we continue to monitor what's happening with the geopolitical situation in the Middle East, and we're keeping a close eye on oil prices.
But despite the pullback, we are still looking at elevated levels, with WTI and Brent above that $100-a-barrel level. So I'm sure you'll continue to monitor that for us.
But you're also tracking prediction markets. So how are traders on Polymarket adjusting to seeing some of these moves in oil?
Mark Payton: Yeah. Traders are becoming more optimistic that this Saudi supply disruption could ease relatively soon.
One of the Polymarket contracts we're watching is when Saudi Arabia's critical East-West oil pipeline comes back online.
Right now, traders put about a 37% chance it's operating again by September 22nd. But give it another week and the picture changes quite a bit.
The odds jump to about 66% by the end of September, and by the end of October, traders put the probability at roughly 87%.
Before it was shut down, it had been moving roughly 4 to 5 million barrels of crude oil a day, and it gives Saudi Arabia a critical way to move oil without going through the Strait of Hormuz.
So there's also an important detail with this market contract: even a partial restart counts.
So traders aren't necessarily betting that the pipeline immediately comes back at full capacity. But there does have to be an official announcement from the Saudi government that it's operating again.
And that's what makes these odds interesting.
The U.S. Energy Secretary says crude oil could be flowing again within days, but traders aren't quite as convinced it will happen that quickly.
By the end of September, though, they're putting the odds at roughly two in three, and that lines up with what we're seeing in oil today. Some of that immediate supply fear is starting to come out of the market.
Remy Blaire: Well, Mark, a lot to keep our eyes on. So thank you so much for weighing in at this noon hour here in New York. I appreciate it, Mark.
