Previous Session Close

The S&P 500 added 0.72% and the Nasdaq 100 gained 0.65%, extending the recovery that Citadel Securities flagged as the end of the summer reset. The Dow climbed 0.54%, lifted by Caterpillar’s 9% surge on a massive earnings beat — AI-driven power unit demand was the standout line item. The Russell 2000 was the odd one out, slipping 0.48% as small-caps failed to keep pace with large-cap momentum.

Consumer Discretionary led all sectors at +3.29%, with Energy close behind at +1.00%. Materials dragged hardest, falling 2.34%. Healthcare dropped 0.59% despite Pfizer posting a quarterly beat on Eliquis demand. The VIX settled at 15.65, down 2.13% — firmly below 20 and reflecting a market that’s pricing risk appetite, not hedging against it.

Overnight Futures & Global Read

Futures are building on yesterday’s gains. Nasdaq futures lead at +0.91%, driven by Palantir’s pre-market surge on earnings. S&P 500 futures are up 0.21%, Dow futures add 0.72%, and Russell futures edge higher by 0.25%. The breadth gap between tech-heavy Nasdaq and the Russell carried over from the cash session — large-cap growth is still running the tape.

The setup favors a gap-up open, though the Nasdaq-to-Russell spread bears watching. If small-caps can’t catch a bid by midday, the rally stays narrow.

Commodity & FX Setup

Metals are the overnight story. Gold pushed to $4,112, up 1.93%, while silver jumped 2.50% to $59.11 and copper added 2.01% to $6.645. The simultaneous rally in gold (traditional safe haven) and copper (growth proxy) suggests inflation expectations are firming rather than pure risk-off positioning — consistent with the 10Y yield climbing 1.76% to 4.745%.

WTI crude slipped 0.45% to $79.98 despite a headline about a vessel being hit in the Strait of Hormuz. That geopolitical risk hasn’t priced through yet — energy traders appear to be watching for follow-through before bidding crude higher. The DXY ticked up 0.15% to 99.95, holding just below the psychological 100 level. EUR/USD and GBP/USD both softened, with sterling the weaker leg at -0.31%.

Catalyst Watch

Caterpillar earnings momentum: CAT’s 9% move is the kind of price action that drags the entire industrials complex. The AI data center power unit angle adds a fresh narrative — Caterpillar as an AI infrastructure play wasn’t consensus. Watch XLI for follow-through buying.

Palantir pre-market rip: Futures are pricing in a strong Palantir print. If the stock holds its gains through the open, it reinforces the AI-adjacent trade that’s been powering the Nasdaq. A fade would signal the market is done paying up for AI multiples this cycle.

Strait of Hormuz incident: A vessel reported being hit in the Strait. Oil barely flinched overnight, but escalation would reprice energy fast. The Energy sector’s +1.00% gain yesterday gives it a cushion — any crude spike above $80 could extend that move.

Bottom Line

Bias is risk-on into the open. Futures are green, VIX is subdued, and earnings are delivering — CAT and Pfizer beat, and Palantir’s move suggests the AI trade still has fuel. The level to watch is whether the S&P can hold above yesterday’s close on any intraday dip; a higher low would confirm the buy-the-summer-dip thesis that’s building. The single most important driver today is the Palantir reaction — it’ll tell you whether this market rewards growth at any price or has started to discriminate. Luna3 will be tracking the session as it develops.

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