Previous Session Close

Tuesday’s session split the market in two. The Dow gained 0.58% while the Nasdaq 100 dropped 1.90% — a nearly 250-basis-point spread that screams rotation. The S&P 500 fell 0.60% and the Russell 2000 shed 0.87%, both dragged lower by the tech rout. Technology (XLK) was the clear laggard at -2.79%, with SpaceX’s hot IPO debut apparently pulling capital away from existing mega-cap tech — Microsoft’s weakness was called out explicitly. Financials (XLF) led the other side at +1.47%, joined by Industrials (+0.65%) and Materials (+0.42%). The VIX slipped to 16.35, which is notable: a sub-17 reading on a day tech gets hammered suggests the sell-off was orderly rotation, not broad risk-off.

Overnight Futures & Global Read

Futures are pointing to a strong reversal at the open. Nasdaq futures lead the bounce at +1.64%, with the S&P 500 at +1.04%, Dow +0.80%, and Russell +0.86%. That Nasdaq outperformance overnight suggests dip-buyers are stepping into the tech names that got sold hardest yesterday. The broad-based green across all four contracts — with small-cap Russell participating — points to genuine risk appetite rather than just a mechanical mean-reversion. All of this sits under one giant asterisk: the Fed rate decision drops today, and positioning ahead of it is likely compressing volatility.

Commodity & FX Setup

Gold is holding at $4,350, up 0.44% — steady but not surging, which reads as hedged rather than panicked ahead of the Fed. Silver is the standout, up 9.9% over the past week, reflecting industrial demand tailwinds on top of the precious metals bid. WTI crude is flat at $75.91, keeping energy stocks (XLE -0.34% last session) in a holding pattern. Copper at $6.535, up 0.70%, continues to signal the growth outlook hasn’t cracked. On FX, the dollar index is essentially unchanged at 99.66 — a sub-100 DXY with rates ticking higher (10Y at 4.487%) suggests the market is pricing a dovish hold or at least dovish forward guidance from Warsh’s first meeting.

Catalyst Watch

The entire session pivots on the Fed. Kevin Warsh chairs his first FOMC rate decision today, and the headlines frame it as a “challenging inflation backdrop.” Markets will parse both the rate decision and, more importantly, the statement language and any updated dot plot for clues on Warsh’s policy bias. The “peak stagflation has passed” narrative from several strategists gives the market a reason to lean constructive, but Warsh needs to confirm that framing. Beyond the Fed, SpaceX’s post-IPO trading will continue to pull attention — and potentially capital allocation — across the tech complex, particularly names like Microsoft that are already under pressure.

Bottom Line

Bias into the open is cautiously risk-on. Futures are green across the board, the VIX is subdued, and yesterday’s tech sell-off looks rotational rather than structural. But this is a Fed day — the real session starts at 2pm ET when the statement drops. Watch the Nasdaq 100 around the 730 level: a hold above yesterday’s close would confirm the overnight bounce has legs, while a fade back below it signals the tech rotation has more room to run. The Fed statement is the single variable that will define the session — everything before it is just positioning. Luna3 will be tracking the post-decision price action across all sectors.

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