NewsMeter
The Russell 2000 is tracking toward its best annual performance since 2003, propelled by investor rotation out of large technology stocks.
Three catalysts are driving the move: AI spending, tax changes, and low valuations. The valuation floor Low valuations form the base of the argument.
Small caps had been trading at compressed multiples relative to large-cap peers, giving the Russell 2000 a fundamental entry point the megacap technology trade could not match on price.
Capital flowing into artificial intelligence infrastructure is reaching smaller companies within the Russell 2000's universe, connecting the index to the same technology cycle that had previously concentrated returns at the large-cap end of the market.
Keep reading