Small-Caps Surge: Russell 2000 Hits Record High Amid Tariff Reprieve

The Russell 2000 index, representing small-cap U.S. companies, achieved an intraday record on Thursday, recovery from an April downturn linked to tariff policy under the Trump administration. The index surpassed its November 2024 high, closing at 2,466.86 and surpassing its previous record close from over three years ago.

The index has bounced back by 42% since its April lows, driven by diminished tariff fears and investor optimism. Keith Buchanan of Globalt Investments explained that after years of underperformance, the small-caps rally is likely to continue in a favorable economic environment.

The index has improved alongside the S&P 500 and Dow, as U.S. tariff impacts ease and investors anticipate a Federal Reserve interest rate cut. Small-cap firms benefit from lower rates, and Trump's tax cuts further fuel growth potential over multinational corporations.