The biggest drag on the overall stock market this year continues to be the small-cap sector. While the S&P 500 is up a modest 1.6 percent on the year, the tech-heavy Nasdaq index is down by 2.5 percent. The Russell 2000 small-cap index has performed even worse, losing 4.9 percent on the year.
And those losses have accelerated in recent weeks. Nearly all of the Russell 2000's underperformance this year has taken place in the last month. It has lost 4.6 percent of its value since April 9.
If there's an upside to this, it's that lower stock valuations may lead to an increase in mergers and acquisitions, which tend to be very good for investors. In the first quarter of this year, there were 54 M&A deals worth more than $1 billion, which is up from 37 in the year-earlier period.
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