Will the S&P 500 be above 6845.5 on Dec 31, 2026 at 4pm EST?
Kalshi market: Will the S&P 500 be above 6845.5 on Dec 31, 2026 at 4pm EST?
Alpha Opportunity
Alpha Thesis
We believe the Kalshi contract for the S&P 500 being above 6,845.5 on December 31, 2026 is slightly overvalued at 61%, with our estimate at 55%. The S&P 500 is currently trading at ~6,663, needing a 2.7% rally to clear the threshold. While Wall Street targets average 7,555 (well above), geopolitical risks (Iran conflict, tariff uncertainty) and current momentum suggest this isn't as certain as the market implies.
📐Key Metrics
Key Findings
- 2.7% Is Usually Easy — In a typical year, S&P gains 10%. A 2.7% target would be ~85% likely. But geopolitical risks reduce this.
- Current Momentum Is Weak — S&P has been under pressure in March 2026, trading well below its late-2025 highs.
- Analyst Targets Are Bullish — Goldman's 7,600 implies 14% upside. But analyst targets overshoot in 80%+ of years.
- Iran + Gas Prices — Rising energy costs from the Iran conflict act as a tax on corporate earnings and consumer spending.
- 55% Reflects Mixed Signals — Slightly more likely than not to exceed 6,845, but genuine uncertainty remains.
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Alpha Quality Factors
Criteria that determine how exploitable this mispricing is
Human Bias Detected
Cognitive biases creating this alpha opportunity
General market inefficiency detected — the crowd consensus diverges from fundamentals-based analysis.
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