Small Caps Make a Comeback

This has been a rough year, comparatively speaking, for small-cap stocks, but they may be making a comeback. The benchmark small-cap Russell 2000 index has far outperformed both the Dow Jones Industrial Average and the S&P 500 index this week.

The Russell 2000 has gained 4.6 percent so far this week and rose at least 1 percent in three consecutive sessions. That may not sound like much, but it is its first time doing so since last January.

More significantly, the Russell’s weekly gain marked a 3.81 percentage-point spread between its increase and that of the S&P 500. If that holds, it would mark the widest margin of underperformance between the large-cap index and the Russell on a weekly basis since November of 2016.