Previous Session Close

Monday’s session split cleanly along the growth-value divide. The Nasdaq 100 surged 1.56% to 716.1, powered by a 2.15% rip in technology (XLK) — the strongest single-sector move of the day. The S&P 500 added 0.23% to 739.2 and the Russell 2000 gained 0.87% to 284.1, but the Dow slipped 0.15% to 508.9 as financials (XLF, -0.63%) and materials (XLB, -1.32%) dragged blue-chip industrials lower.

The VIX dropped 5.29% to 17.92 — still above the 15 complacency floor but well off fear territory. That’s the kind of reading that says the market is cautiously constructive: hedging demand is fading, not vanishing. The tech-led advance with a declining VIX is a textbook risk-on setup heading into Tuesday.

Overnight Futures & Global Read

Futures are green across the board. Nasdaq leads at +0.82%, S&P 500 futures are up 0.45% to 7,449, Dow futures add 0.33%, and Russell futures rise 0.94%. The small-cap outperformance in futures mirrors Monday’s cash session — breadth is participating, not just mega-cap tech carrying the tape.

Overnight headlines flagged a violent 16% swing in South Korea over 24 hours, driven by retail “ant” traders. That kind of instability in Asian markets typically sends capital toward US large-cap safety, which may be adding a bid to tonight’s futures.

Commodity & FX Setup

Gold is up 0.68% to $4,365 — a modest bid that reads more as dollar-weakness positioning than outright risk-off. WTI crude dropped 2.15% to $89.34, which eases the inflation narrative and takes pressure off the Fed, but watch energy names (XLE closed +1.14%) for a gap-down at the open if oil stays heavy.

Copper’s 1.56% rally to $6.428 is the more interesting signal — it’s a growth proxy, and when copper rises while oil falls, the market is pricing in economic activity without the inflation tax. The DXY slipped 0.34% to 99.71, barely holding the 100 handle. EUR/USD at 1.158 and GBP/USD at 1.34 both reflect broad dollar softness. A weaker dollar is a tailwind for multinationals and commodities — the setup favours risk assets.

Catalyst Watch

The AI trade is front and centre. OpenAI has joined Anthropic and SpaceX in filing IPO paperwork — three of the most anticipated listings in a generation hitting the pipeline simultaneously. That’s injecting momentum into the entire AI value chain and likely explains Monday’s tech outperformance. Oracle’s stock has surged on AI hype and now faces the “deliver the earnings” test — any pre-market colour on cloud bookings could move semis and infrastructure names.

Broadcom’s recent quarterly results raised questions about cracks in the AI trade. It’s not a collapse thesis, but it’s a reminder that the market is starting to differentiate between AI winners and AI passengers. Apple fell after WWDC, while Micron and SanDisk continued to rebound — the rotation within tech matters as much as the sector’s direction.

Markets are also pricing in an ECB rate hike, which one top economist calls a “mistake in the making.” If that view gains traction, expect EUR/USD to give back some of tonight’s gains and the dollar to find a floor.

Bottom Line

The setup into Tuesday’s open is risk-on with a tech tilt. Futures breadth is healthy, VIX is retreating, the dollar is soft, and the AI IPO pipeline is giving growth investors a fresh catalyst. The level to watch is Nasdaq 100 futures holding above the 29,700 zone — a clean break higher opens the door for the cash session to extend Monday’s 1.56% move. The single biggest driver today is whether AI momentum broadens beyond mega-cap into semis and infrastructure, or whether Broadcom’s warning starts to filter through. Luna3 is watching the tech rotation closely.

Read next: Market Pulse · VIX Term Structure · What Is a Bond?