Does the Small-Cap Rally Have Staying Power?
Finally, stocks outside the tech behemoths are closing the gap. But they need more than Fed rate cuts.
Whether small caps can sustain the rally remains to be seen.
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The Russell 2000 is at an all-time high and it was four years in the making. In a market dominated by tech behemoths, small caps at last taking out a high from 2021 is a sign that the rally is finally broadening. The Federal Reserve’s easing proved the final catalyst for the small-cap universe, which is always rate-sensitive. It quickly retreated after the record, but the index’s gain of over 36% from its trough following Liberation Day on April 2 is remarkable.