US Iran Invasion Odds Jump to 35%

Prediction markets are pricing a 35% probability that the United States will invade Iran before 2027, marking a sharp 6 percentage point surge in 24 hours as traders reassess military escalation risks. The Polymarket contract drew $953,000 in daily volume, bringing total betting activity to $8.7 million since the market opened.

The probability spike represents a stark reversal from recent diplomatic optimism, with nearly $1 million in fresh wagers reflecting trader sentiment that stalled peace negotiations may lead to military confrontation rather than sustained ceasefire. The heavy volume suggests institutional and sophisticated retail participants are actively repositioning on Middle East conflict scenarios.

The market move follows Trump's Easter Sunday social media posts containing what CNBC characterized as "expletive-filled Iran threats," while the Institute for the Study of War released updated analysis on Iranian military positioning. IMF officials have warned that expanded Middle East conflict would drive commodity price increases across multiple sectors, adding economic pressure to military considerations.

Traders will monitor congressional authorization debates and Pentagon deployment announcements for signals that could shift the 65% probability currently pricing against invasion. Any formal military buildup in the Persian Gulf region or withdrawal from remaining diplomatic channels would likely drive the probability higher, while renewed negotiation progress or third-party mediation efforts could reverse the current trajectory before the market's December 2026 resolution deadline.