Small-cap stocks surge amid broadening earnings growth and attractive valuations despite shifting rate expectations.
US equities rose, with the S&P 500 climbing 0.6% and the Russell 2000 leading gains at 1.8%. Small caps outperformed in a rally typically dominated by tech, defying expectations amid recent rate hike speculation.
The Russell 2000’s 16% year-to-date gain contrasts with the S&P 500’s 10%, as earnings outside tech sectors show the strongest growth since 2021. Analysts highlight improving fundamentals and valuations as key drivers for small caps.
Momentum stocks also advanced, with Micron surging 19% after a price target upgrade. Futures indicate slight gains in US and European markets following the rally.