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Previous Session Close

Tuesday was a broad risk-off session with no place to hide except energy and healthcare. The Nasdaq 100 led the decline at -1.85%, dragged lower by a tech sector (XLK) that shed -2.39% on the day. The S&P 500 fell -0.48%, the Dow slipped -0.31%, and the Russell 2000 dropped -0.91% — small caps confirming this wasn’t just a mega-cap problem.

The VIX surged 12.71% to 18.18. That’s still below the 20 threshold that typically signals sustained fear, but the velocity of the move matters more than the level here. Energy (XLE +2.84%) and healthcare (XLV +1.53%) were the only green sectors — a classic defensive-plus-commodity rotation that tells you institutions were repositioning, not just trimming.

Overnight Futures & Global Read

Futures are extending the damage. S&P 500 futures are down -0.87% to 7,486, Nasdaq futures are off -1.33%, and Russell futures are sliding -1.17%. The Dow is pointing to a -1.08% gap lower. This isn’t a drift — it’s a continuation bid that suggests sellers haven’t finished.

The global backdrop isn’t helping. South Korea has officially entered bear market territory according to overnight headlines, and CoreWeave stock is sinking as the mag-seven trade unwinds. Risk appetite is thin across regions heading into the US open.

Commodity & FX Setup

Oil is the story. WTI crude surged 5.41% to $74.25 after Trump declared the US-Iran ceasefire “over” — the biggest single-session jump in two months. That’s a direct inflation input and explains why energy stocks outperformed while everything else bled. Expect XLE to gap higher again at the open.

Gold dropped -2.01% to $4,062 and silver fell -3.37%, which is unusual during a risk-off session. The explanation sits in rates: the 10-year yield climbed to 4.529% (+0.98%) and the 30-year breached 5.04%. Rising real yields are a headwind for non-yielding metals. Copper fell -1.56%, confirming the growth-slowdown signal.

The dollar index is flat at 101.1 despite the chaos — EUR/USD slipped -0.29% and sterling fell -0.43%. USD/JPY pushed to 162.5, extending yen weakness.

Catalyst Watch

Three items worth tracking into the open. First, Trump’s Iran comments are the dominant macro driver — any escalation or walk-back will move oil and by extension the entire energy complex, inflation expectations, and rate-sensitive growth names in opposite directions.

Second, Kevin Warsh is reportedly planning to stop scripting the Fed’s forward guidance. If confirmed, this is a regime change in how the Fed communicates. Less predictability means wider rate volatility and a higher equity risk premium — exactly the wrong setup when the 30-year is already above 5%.

Third, Rivian announced a 75-million-share public offering, adding dilution pressure to a name already under stress. Watch for contagion across EV and speculative growth — secondary offerings in weak tape conditions tend to ripple.

Bottom Line

The bias going into Wednesday’s open is clearly defensive. Futures are pointing to a gap lower, oil is surging on geopolitical risk, and rising long-end yields are squeezing growth multiples from both sides. The level to watch is 7,450 on S&P futures — a break below that puts the index at its lowest since late May. The single most important driver for the session is whether the Iran situation escalates further or whether markets can stabilize around the crude move already priced. At Luna3, we’re watching energy longs and tech exposure closely today.

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