Author: Kalshi Team
Compiled by: Shenchao TechFlow
Shenchao Introduction:The century-long evolution of financial markets is essentially a history of measurement that transforms discrete assets into standardized benchmarks through "indexing." From the debut of the Dow Jones Industrial Average in 1896 to the S&P 500 reshaping global passive investing in 1957, indices have formed the cornerstone of modern asset allocation, passive funds (ETFs), and derivatives risk hedging.
However, the global financial system has always lacked a unified, quantified, standardized measurement tool for the discrete events that shape real-world business and macroeconomic trends (such as election political landscapes, supply chain disruptions, extreme weather, and sudden geopolitical conflicts). Now, S&P Dow Jones Indices (S&P DJI), an index compilation giant with a century-old reputation, has officially reached a multi-year landmark strategic partnership with Kalshi, the leading compliant prediction market under U.S. CFTC regulation.
The two parties will join forces to pioneer a next-generation real-world event index system based on event contracts, and for the first time introduce the S&P 500 and Dow Jones indices into Kalshi for compliant contract clearing. This partnership marks that prediction markets are leaping from discrete single-point speculation to macro system-level financial infrastructure that global mainstream institutional investors can allocate and hedge.
S&P Dow Jones Indices and Kalshi are working together to build the next generation of financial markets. Through this multi-year strategic partnership, we will jointly build new indices based on Kalshi event contracts and provide investors with a new way to trade S&P Dow Jones index benchmarks on the Kalshi platform.
The Dow Jones Industrial Average was born in 1896, and the S&P 500 followed in 1957. The underlying logic of both is very simple: to condense discrete individual stocks into a unified benchmark ruler, allowing market participants to view broader macroeconomic market trends more clearly and thoroughly.
Over time, financial products derived from these core benchmarks have completely reshaped the global investment paradigm.
Index funds, exchange-traded funds (ETFs), futures, and options have provided global investors with effective ways to diversify allocations, enabling people to share in the overall market's upside gains without betting on the success or failure of any single company, and to calmly hedge against broad market macroeconomic volatility risks.
These indices have become the four pillars and eight beams of the global financial system, widely adopted by retail investors, pension funds, and sovereign institutions around the world. By the end of 2024 alone, assets directly tracking or benchmarked to the S&P 500 had exceeded $20 trillion.
As financial markets continue to evolve, indices and the financial derivative tools built around them have gradually broken through the boundaries of the stock market and expanded comprehensively into multiple asset classes such as bonds, commodities, and foreign exchange.
The next milestone of evolution is to extend this rigorous indexing measurement structure comprehensively to the real-world events that profoundly shape everyone's life.
This is precisely the core direction we are building together with S&P Dow Jones Indices: new macro indices composed of Kalshi event contracts as underlying components.
Event contracts can directly map the public's expectations for the future direction of the real world into transparent market prices. As traders conduct real-time matching on Kalshi, these prices keenly reflect the dynamic evolution of market expectations for the probability of various potential events occurring.
Packaging and compiling a highly correlated group of event contracts into an index will enable people to capture at a glance the trajectory of macro expectation shifts across an entire specific event category.
Imagine what unprecedented broad space this will open up in the financial world:
A political power landscape index that aggregates comprehensive expectations for U.S. election outcomes and control of both chambers of Congress;
A supply chain risk index that gathers market forward-looking signals on potential risks such as global trade disruptions and shipping blockages;
A macro index tracking the impact of artificial intelligence on employment, helping society as a whole take the real-time pulse of structural expectation changes in the labor market;
A comprehensive sports event index that quantifies the trajectory of major events that affect the economic lifelines of broadcasters, brand advertisers, host cities, and small businesses along the streets;
A weather risk index that measures the probability of extreme weather that profoundly determines crop harvests, seasonal energy consumption, and corporate quarterly revenues.
Each index can distill and package scattered individual event contracts into an intuitive composite indicator, helping decision-makers gain insight into the systematic evolution of related risks.
For example, a company closely monitoring weather risk can use this to comprehensively monitor the overall expected risk across all regions where it operates; while political analysts can gain a macro-level overview of comprehensive election sentiment shifts across multiple constituencies.
S&P Dow Jones Indices brings deep expertise in transforming these emerging trading markets into long-term stable standard measures that the entire market can continuously track.
Compiling an index means that rigorous and objective component inclusion criteria, scientifically standardized weighting combination models, and dynamic adjustment mechanisms when the underlying market structure evolves must be established.
In the long run, financial products built around these real-world event indices will provide the market with diversified risk exposures to participate in such events and create new tools for hedging real-world shocks.
Just as stock indices became the cornerstone of public funds and derivatives markets, indices built on event contracts will in the future support financial products for risk hedging that can broadly cover the various risks individuals and businesses face in their daily real lives.
In addition, this strategic partnership will also enable us to directly list compliant contracts on Kalshi linked to the S&P 500, Dow Jones Industrial Average, and other S&P flagship indices, with final cash settlement based entirely on S&P official authoritative data.
This provides a new path for a broad range of investors and professional traders to directly gain exposure to the above benchmark indices through the Kalshi market.
S&P Dow Jones Indices uses its proven authoritative methodology to calculate indices and publish official fair values, and it is precisely these official data that will directly determine the final delivery and settlement results of the relevant contracts on the Kalshi platform.
For traditional financial institutions that already deeply use these benchmark indices to manage large asset portfolios, this brings their most familiar and trusted indices onto our compliant exchange, with delivery and settlement fully anchored to the same set of authoritative official data sources they have long relied on.
The collaboration between the two parties is greatly expanding new dimensions for individuals and institutions to use the Kalshi trading market and manage real-world macro risks.
One day in the future, global investors will be able to easily track and participate in every major real-world event that shapes our daily lives, just as they track and trade the S&P 500 today.
Explore S&P's new official index markets on the Kalshi platform.
