Between the artificial intelligence (AI) disruption trade — which has punished some large- and small-cap growth names — and conflict in Iran, some investors may be thinking now is an appropriate time to go into wait-and-see mode when it comes to smaller stocks. It's not illogical to feel that way.
Market lore is littered with tales of small-cap companies becoming large-caps, generating significant returns for early investors along the way. Those tales often tempt new investors to embrace smaller stocks, including some on the more speculative side of the ledger.
Small-cap stocks are off to hot starts this year. This sparks hopes the asset class could finally be in for a year of impressive performances.
Broadly speaking, small-cap stocks and the related ETFs frustrated investors this year. However, there's hope (and more) for smaller stocks entering 2026.
One day doesn't make a trend. But it's hard to ignore the effect Fed Chair Powell's comments made last Friday had on equities, particularly small-caps.
Small-cap stocks and ETFs appear to be finding solid footing. That's an arguably surprising scenario given the reputation of summer months being trying for equities.
Look now, because small-cap stocks and relevant ETFs are having their long-awaited moments. Following a one-month gain of more than 6%, the Russell 2000 Index is higher by nearly 9.30% for the 90 days ending July 1.
In an extension of a long-running theme, biotechnology stocks are disappointing investors again in 2025. Large-cap gauges addressing the industry have performed mostly in line with the S&P 500.
There's roughly 10 months left in 2025. That's ample time for small-caps stocks and related ETFs to potentially deliver on long-awaited outperformance of large-caps counterparts.
Some market participants were enthusiastic about President Trump's return to the White House. One reason was the notion that the regulatory environment in Corporate America would become more hospitable.
Small-caps momentum seemingly waned as quickly as it arrived. But some market observers believe smaller stocks are poised to regain their bullishness.
Once stalwarts of the healthcare investing realm, biotechnology stocks and related ETFs have been laggards going back to 2021. That's a lengthy run of disappointment that's given some investors pause about embracing the space.