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Previous Session Close

Tuesday’s session split cleanly along the growth-value fault line. The Nasdaq 100 dropped 1.90% while the Dow held up at just -0.25%, a 165-basis-point spread that screams rotation. The S&P 500 fell 0.77% and the Russell 2000 lost 0.85%, both dragged by the tech unwind. Energy was the standout, with XLE surging 3.01% as oil climbed toward $80. Financials added 0.65%, buoyed by BlackRock reporting record assets under management at $15 trillion. Technology bore the brunt, with XLK sinking 2.42% — the worst sector print of the day by a wide margin. The VIX settled at 16.38, actually falling 4.55% despite the equity weakness. That’s a market pricing the selloff as rotational, not systemic.

Overnight Futures & Global Read

Futures are pointing to a modest recovery. Nasdaq futures lead at +0.45%, with S&P 500 futures up 0.12% to 7,600. Dow and Russell futures are essentially flat, both fractionally red. The Nasdaq bid is largely ASML-driven — the Dutch chipmaker beat Q2 estimates and raised its full-year forecast, giving the semiconductor complex a lift after Tuesday’s bruising. The overnight tone suggests buyers are willing to step back in on tech at these levels, but conviction is thin. Dow futures sitting at -0.02% tells you the value trade isn’t chasing higher either.

Commodity & FX Setup

Oil is the headline mover, with WTI at $79.87 (+0.67%) pressing $80 on Iran-related geopolitical risk. That’s direct fuel for XLE’s momentum — energy was already Tuesday’s top performer and fresh supply concerns give it another leg. Gold pulled back 0.64% to $4,035, consistent with risk appetite stabilising rather than deteriorating. Copper gained 0.58% to $6.37, a mild positive read on global industrial demand. Silver underperformed at -0.92%. On FX, the dollar index slipped 0.30% to 101, with EUR/USD at 1.142 and GBP/USD at 1.34. A weaker dollar supports multinational earnings and commodity prices — both tailwinds if the trend holds into the session.

Catalyst Watch

Three items worth tracking. First, the June CPI print showing a 0.4% monthly decline — the steepest since 2020 — will dominate macro conversation. Rate-cut pricing should firm up, though the bond market isn’t fully buying it yet: the 10-year yield rose to 4.609% (+0.88%) and the 30-year pushed above 5.09%. Second, ASML’s earnings beat and raised guidance will set the tone for semiconductor and AI-adjacent names at the open. Wall Street’s “theme-o-meter” is calling the AI bull market back — that narrative either gets validated or faded today. Third, oil at $80 on Iran headlines creates a cross-current: bullish for energy, but a potential inflation headwind that complicates the soft-landing read from CPI.

Bottom Line

The setup leans cautiously risk-on. Cooling inflation plus an ASML beat gives bulls a reason to buy the tech dip, but rising long-end yields and oil at $80 keep the rotation trade alive. The level to watch is Nasdaq 100 futures holding above 29,900 — a clean reclaim of that zone confirms Tuesday’s selloff was a one-day flush rather than the start of a deeper unwind. The CPI-versus-yields tension is the single most important thread for the session, and Luna3 will be tracking how it resolves into the close.

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