Things have been looking good for small-cap stocks of late. The Russell 2000 on Thursday closed at a record high, topping its previous all-time peak set in 2021. The benchmark is also on pace for its seventh straight week of gains, which would be its longest weekly winning streak since 2020. Traders had been piling into small caps in recent weeks as they anticipated the Federal Reserve resuming its rate-cutting cycle this month. Indeed, the Fed lowered its overnight lending rate by a quarter-percentage point. History shows that rate cuts following a long pause in an easing cycle have given a big boost to smaller names. The small-cap index has returned on average 35% over a 12-month period after the Fed cuts rates following a cutting cycle pause that lasted at least 126 trading days , Canac

See Full Page