CME Group Inc

Kalshi has asked the Securities and Exchange Commission to hold off on approving new binary options contracts from Cboe Global Markets tied to corporate earnings metrics, arguing the products would compete with event contracts Kalshi already offers. In a letter sent this month, Kalshi said the SEC should wait until a broader effort to clarify regulatory lines between the SEC and the Commodity Futures Trading Commission is finished. The dispute reverses earlier industry debates in which Cboe and CME Group argued prediction market products were approved too quickly by the CFTC. Kalshi operates its contracts under CFTC oversight, while Cboe sought SEC approval for its proposed binary options tied to corporate performance metrics. Kalshi is separately seeking CFTC approval for new perpetual equity futures that could compete with Cboe's S&P 500 options.

The Hyperliquid Policy Center, a policy advocacy group for Hyperliquid, submitted a comment letter to the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission on August 24, calling for the adoption of a unified classification framework for perpetual contracts. The letter responds to a joint request for comment issued by the two commissions in June on the definitions of swaps and security-based swaps, and argues that whether a perpetual contract is a future or a swap should be determined by the contract's economic structure and trading mechanics, not by the reference asset. If a contract has the characteristics of a future—standardization, fungibility, future delivery, and offset by opposite trades—it should be treated the same whether it references bitcoin, crude oil, or individual stocks. As the market has grown without a settled classification, activity has flowed offshore, and CFTC Acting Chairman Michael Selig has said the question is whether it will exist under U.S. oversight and standards. President Donald Trump said at the White House on the 19th that Selig is working to bring Hyperliquid into the United States in a fully compliant and lawful manner, and the native token HYPE rose sharply afterward. Hyperliquid has accumulated $480 billion in trading volume and about $4 billion in open interest in the HIP-3 market alone over ten months. CME Group and Intercontinental Exchange are seeking to bring it under regulation, citing price manipulation risk, and CME sued the CFTC in June. In Japan, the revised Financial Instruments and Exchange Act was enacted in July, classifying crypto assets as financial instruments under the law, but industry self-regulation limits leverage for retail investors to two times, and perpetual contracts referencing stocks or crude oil are not offered. If the United States resolves the classification issue, it could also influence domestic regulatory design in Japan.

The CEO of CME Group has called on the CFTC to step up oversight of prediction markets after suspected cases on Kalshi and Polymarket, before being rebuffed by the CFTC chairman as fake news. Terry Duffy, CEO of CME Group, said during a meeting with the CFTC that there are certainly people trying to manipulate these contracts, citing the case of a US soldier accused of using classified information to bet on Polymarket about the removal from power of Nicolas Maduro, as well as an investigation into a White House teleprompter operator who may have used President Donald Trump's speech information to buy contracts on Kalshi. Meanwhile, CFTC Chairman Michael Selig dismissed the allegations as fake news. Polymarket founder Shayne Coplan defended the company's system, saying transactions are recorded on the blockchain and can be checked at any time, while Intercontinental Exchange, owner of the NYSE, has already invested more than 1.6 billion dollars in Polymarket, with ICE CEO Jeff Sprecher revealing that the company is considering joining Polymarket's latest funding round.

Federal Reserve Chair Kevin Warsh maintained a hawkish tone at the July FOMC press conference but signaled a potentially more dovish approach to measuring inflation. The committee held rates steady, with three members dissenting in favor of a hike. Warsh reiterated the 2% inflation target but noted he is looking at a broader set of inflation data beyond PCE, and has previously expressed support for a trimmed-mean method that would show inflation closer to 2.2% to 2.4% rather than the 3% to 3.4% range under the current core PCE measure. Following his comments, market expectations for a half-point rate hike by September fell to zero, while the probability of no change more than doubled to nearly 39%.

The Federal Reserve held its key interest rate steady on Wednesday, but three regional presidents dissented in favor of a quarter-point increase. The Federal Open Market Committee voted 9-3 to keep the federal funds rate in a range between 3.5% and 3.75%, with Cleveland's Beth Hammack, Minneapolis's Neel Kashkari, and Dallas's Lorie Logan casting the no votes. The dissenters cited persistent inflation above the Fed's 2% target for more than five years, while the post-meeting statement noted they preferred to raise the target range by a quarter percentage point. The decision presented an early challenge to Chairman Kevin Warsh, who has resisted providing clear forward guidance on policy. Markets had largely expected the hold, though some saw a roughly one-in-three chance of a surprise hike.

The Federal Open Market Committee is expected to leave interest rates unchanged at its July 29 meeting despite the probability of a hike tripling over the past week to 37.9%, according to the CME Group's FedWatch Tool. The FOMC remains a reactive body that relies on backward-looking economic data, and key inflation figures such as June Core PCE will not be released until July 30, one day after the meeting concludes. Fed Chair Kevin Warsh has eliminated forward-looking guidance from policy statements, arguing it can constrain decision-making, which adds to market uncertainty. While a rate hike is unlikely today, there is a high probability of an increase at the September 15-16 FOMC meeting as inflationary pressures from rising energy costs and Trump-era policies persist.

A coalition of 44 state attorneys general told the Commodity Futures Trading Commission that the agency lacks statutory authority to regulate sports-related event contracts on prediction market platforms. In a letter sent as the public comment period for the CFTC's first proposed rule on prediction market regulation expired, the states argued the measure exceeds the CFTC's powers, conflicts with the Constitution, and would be arbitrary and capricious. The letter, led by Ohio Attorney General Andy Wilson, urged the CFTC to restart its rulemaking and clarify that sports bets and gambling are subject to state law, not tradable on designated contract markets. Attorneys general from Florida, Georgia, New Hampshire, Missouri, and Texas did not sign. The jurisdictional fight has intensified as prediction market volumes surged, driven by sports contracts including those tied to the 2026 FIFA World Cup, while the CFTC maintains all event contracts are swaps under its exclusive jurisdiction and is currently litigating with nine states.

Zacks Investment Research identifies CME Group, Intercontinental Exchange, Nasdaq, and Cboe Global Markets as securities and exchanges stocks to watch despite intense industry competition. The industry faces challenges from alternative trading systems and digital-asset platforms, but these four companies benefit from diversified product portfolios, rising trading volumes, and a growing focus on non-trading revenue sources such as market data and technology services. Nasdaq carries a Zacks Rank #2, or Buy, while CME Group, Intercontinental Exchange, and Cboe Global Markets each hold a Zacks Rank #3, or Hold. The broader Zacks Securities and Exchanges industry has underperformed the S&P 500 year to date, losing 11.5% compared with the index's 7.6% gain, and its aggregate earnings estimates for 2026 have decreased 1.7% since April.