Previous Session Close

Tuesday’s session delivered a broad green tape with a clear small-cap tilt. The Russell 2000 led at +0.93%, its strongest single-session gain in weeks, while the Dow added +0.51% and the Nasdaq 100 gained +0.46%. The S&P 500 barely moved at +0.14%, held back by a sharp healthcare selloff — XLV dropped -0.97%, the session’s worst performer by a wide margin.

Technology (+1.25%) and materials (+1.18%) carried the upside, with energy (+1.15%) riding oil strength. Consumer discretionary slipped -0.51%, the only other sector in the red. The VIX ticked up +2.16% to 16.11 — still comfortably below 20 but no longer compressing, suggesting the options market is pricing in a mild uptick in event risk without any real fear.

Overnight Futures & Global Read

Futures are painting a split picture. Nasdaq futures are green at +0.21%, extending Tuesday’s tech bid, but Dow futures are down -0.29% and Russell futures are off -0.40%. That divergence — mega-cap tech holding while cyclicals fade — is the opposite of yesterday’s small-cap leadership and hints at some rotation fatigue overnight.

S&P 500 futures sit at 7,618, down -0.08%, essentially flat. The narrow leadership in pre-market suggests the open could hinge on whether Tuesday’s breadth buyers come back or whether this reverts to a tech-only tape.

Commodity & FX Setup

Oil is the standout. WTI surged +2.24% to $95.86, driven by escalating Middle East tensions flagged in overnight headlines alongside fresh tariff rhetoric from the Trump administration. At $96, oil is pressing toward the $100 psychological level — bullish for energy names (XLE +1.15% Tuesday) but a headwind for airlines, transports, and the broader inflation outlook.

Gold is flat at $4,491 (+0.04%), treading water despite the geopolitical noise. Copper slipped -0.58%, a soft read on near-term industrial demand. Silver dropped -0.88%. The dollar index edged up to 99.31 (+0.09%), still sub-100 but firming — USD/JPY at 159.80 keeps yen-weakness pressure on Japanese exporters. Treasury yields fell modestly (10Y at 4.455%, -0.45bp), a quiet bid for duration.

Catalyst Watch

SpaceX IPO filing. The company plans to sell 555.6 million shares at $135, the largest tech IPO in years. This won’t trade today, but the filing reshapes sentiment around private-to-public liquidity and could lift adjacent names in space, defense, and venture-backed tech.

Palo Alto Networks earnings. The cybersecurity giant fell on results overnight. Watch for read-through into CrowdStrike, Fortinet, and the broader SaaS security cohort at the open.

Generac’s AI hyperscaler deal. Shares soared after announcing a generator contract with an AI data center operator. This extends the power-infrastructure-for-AI theme — Eaton, Vertiv, and Quanta Services are the names to watch for sympathy flow. Meanwhile, fresh Trump tariff headlines add a wild card that could pressure import-heavy industrials and consumer names.

Bottom Line

The setup into Wednesday’s open is cautiously risk-on but narrowing. Tech futures holding green while small-caps and Dow pull back suggests the market wants to lean into AI and growth momentum but isn’t ready to chase the broad cyclical bid from Tuesday. Oil at $96 is the inflation variable that keeps the session from being a straightforward buy-the-dip story. The level to watch is S&P 7,618 — a clean hold above keeps the path of least resistance higher; a break below opens a retest of last week’s range. Luna3 sees this as a stock-picker’s tape, not a directional one.

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