Russell 2000 index of small-cap stocks are struggling against S&P 500, Dow Jones, Nasdaq. Worrying signs for small companies in U.S.?

U.S Stock Market indexes -- S&P 500, Dow Jones, and Nasdaq -- witnessed big jump for this calendar year but the small-cap stocks are struggling at the Wall Street. On Friday, Russell 2000 index of smaller companies rose 64.48 points, or 2.8 per cent, to 2,369.59. Russell 2000 is down 18.64 points, or 0.8 per cent in the week. For the year, Russell 2000 is up 139.43 points, or 6.3 per cent. For the year, S&P 500 is up 721.36 points, or 12.3 per cent, Dow Jones is up 3,701.19 points, or 8.7 per cent, Nasdaq is up 2,962.29 points, or 15.3 per cent.

The relative small-cap to large-cap 10-year annualized return fell to -4 per cent in October, the lowest since the late 1990s. Since the 1930s, there have been only a few periods when small caps underperformed so severely, including the 1950s, the early 1990s, and the late 1990s. This comes as the Russell 2000 index has risen +102 per cent over the last 10 years, while the S&P 500 is up +220 per cent, Russell 2000 is up 139.43 points, or 6.3 per cent, The Kobeissi Letter reported.

YTD, US small-cap stocks have risen just +6 per cent and now reflect one of the worst-performing global regions, behind India's -5 per cent decline, as per The Kobeissi Letter.


During the same period, South Korea, Spain, and Brazil recorded +58 per cent, +48 per cent, and +46 per cent returns, respectively, as per The Kobeissi Letter.

For the week, the Dow was down 1.9 per cent, the S&P 500 was down about 2 per cent and the Nasdaq was down 2.7 per cent. Also, the small-cap Russell 2000 index fell for a fourth straight week in its longest run of weekly losses since March.

Stocks have been especially volatile in the past two sessions, reflecting heightened investor anxiety over high valuations in the technology sector, ambitious AI spending plans and concerns about what might happen at the December Fed meeting.

Few companies on the S&P 500 noted any significant effects on their businesses from the shutdown. But the index includes only the biggest companies in the country, which are generally better able to deal with economic shocks. Smaller companies have seemed to fare worse.

FAQs

Q1. What are three indexes of U.S. Stock Market?

A1. U.S Stock Market indexes are S&P 500, Dow Jones, and Nasdaq.

Q2. What do we know about smaller companies?

A2. Few companies on the S&P 500 noted any significant effects on their businesses from the shutdown. But the index includes only the biggest companies in the country, which are generally better able to deal with economic shocks. Smaller companies have seemed to fare worse.