Previous Session Close

Monday delivered a clean rotation day. The Nasdaq 100 dropped 1.00% as Technology (XLK) shed 1.78% — the worst sector print on the board. The S&P 500 slipped 0.29% and the Russell 2000 lost 0.66%, but the Dow eked out a 0.27% gain on the back of Financials (XLF), which led all sectors at +1.29%. That Dow-up-Nasdaq-down split tells the story: money moved out of mega-cap tech and into banks and value names ahead of Nvidia’s report.

VIX settled at 15.81, down fractionally. Below 16 reads as calm, but one Wall Street fragility measure just hit its ceiling — the same level that preceded the last volatility spike. Complacency with a trapdoor underneath.

Overnight Futures & Global Read

Futures are clawing back Monday’s damage. S&P 500 futures trade at 7,698 (+0.37%), Nasdaq futures lead the recovery at +0.77%, and Russell futures are up 0.57%. The bounce has a pre-earnings positioning feel — shorts covering ahead of Nvidia rather than fresh conviction buying. Dow futures are up 0.39%, extending the value lean from Monday’s cash session. All four contracts are green, but the Nasdaq’s outperformance overnight is the reversal worth watching. If that fades into the open, Monday’s rotation has legs.

Commodity & FX Setup

Gold rallied 1.20% to $4,696, extending its bid as a hedge against both AI-capex debt concerns and geopolitical noise around Iran. Oil moved the opposite direction — WTI dropped 2.91% to $82.54 after investors shrugged off Treasury Secretary Bessent’s “economic D-Day” rhetoric on Iran sanctions. That oil decline pressured Energy (XLE, -0.83%) on Monday and removes one inflation input from the Fed’s calculus heading into Jackson Hole.

Copper gained 0.60%, a mild growth-positive read. The dollar index (DXY) was flat at 99.04, holding just below 100. Treasury yields fell — the 10-year down to 4.704% and the 30-year to 5.231% — a bond bid that supports equity multiples but also whispers slowdown. EUR/USD and GBP/USD both ticked lower, keeping the dollar range-bound.

Catalyst Watch

Nvidia earnings. The dominant event. Headlines frame the AI build-out as potentially “too big to fail,” and Nvidia’s Rubin chip debut faces both a growth test and fresh scrutiny on how the AI infrastructure boom is being financed. A beat with weak guidance would validate the Monday rotation out of tech. A clean beat-and-raise likely reverses it in one session.

Jackson Hole. The Fed’s annual summit is in the countdown window. Any scheduled remarks or leaked positioning could move rates and rate-sensitive sectors. The bond rally (10Y -0.72%) suggests the market is leaning dovish.

Market breadth deterioration. Nearly two-thirds of the S&P 500 have already seen sharp selloffs according to Monday’s headlines. That breadth reading — most names already correcting while the index holds near highs — sets up either a broadening recovery or a catch-down for the remaining third.

Bottom Line

The overnight bounce is Nvidia-centric. If the report delivers, the Nasdaq reclaims Monday’s loss and the rotation trade pauses. If it disappoints, the Financials-over-Tech trade from Monday accelerates. Watch the Nasdaq 100’s reaction in the first 30 minutes — that will tell you whether this futures bounce was real demand or pre-earnings short covering. The single most important number tonight is Nvidia’s forward revenue guide, not the earnings beat. At Luna3, we are watching the bond-equity divergence closely — falling yields and rising gold alongside an equity bounce is a setup that resolves one way or the other fast.

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