Futures are split: Dow down hard, S&P soft, Nasdaq roughly flat, as an escalation in the Middle East (Houthi strikes hitting Saudi energy infrastructure) sends Brent toward the high-$90s/triple digits and pressures long-end yields higher into a data-heavy back half of the week.
The cross-asset tell here is the bond market — 10-year near 4.80%, 30-year above 5.25% — which is doing more damage to cyclicals and rate-sensitives than to mega-cap tech, where AI-linked names are absorbing the oil shock better than industrials and financials. VIX sits near 15.7, up modestly but still low relative to the headline risk, meaning vol sellers haven't capitulated and dealers are likely still net long gamma into the 7,650-7,700 zone on SPX, which caps realized moves until that changes. QQQ around 719 is roughly 3.5% off its June record and holding above short-term support; a break lower opens air toward the low-700s.
Macro focus: PPI prints Thursday, CPI Friday, both feeding into the September 15-16 FOMC where markets are pricing meaningful odds of a hike given last week's stronger-than-expected payrolls and now an oil-driven inflation impulse. Canada's retaliatory tariffs on roughly $20 billion of US goods add a second, quieter drag on cyclical and industrial names.
The risk: a sustained Brent move through $100 or a hawkish CPI surprise forces a repricing of hike odds simultaneously with yields, which would hit both duration-sensitive tech multiples and cyclicals at once — the one scenario where the Dow/Nasdaq divergence collapses into a broad risk-off unwind rather than a rotation.