Small-cap stocks returned strongly, and Russell 2000 approached an all-time high

The Russell 2000 Index (Russell 2000), which is dominated by small-cap stocks, has achieved double-digit percentage gains so far in November

On Monday, the rise in small-cap stocks approached an all-time high and is expected to record the biggest monthly gain of the year. Due to the Thanksgiving holiday, trading hours have been shortened this week, and investors are preparing to put an end to November.

According to FactSet, the Russell 2000 Index — a measure of the performance of US small cap stocks — has risen 11.2% so far in November, and is expected to be the highest since last year The biggest monthly increase since December. Overall, small-cap stocks are gradually catching up with the S&P 500 (S&P 500) gains since the beginning of the year.

According to FactSet data, the November increase of the Russell 2000 index far exceeded the 4.9% increase of the S&P 500 index in the same month. Small-cap stocks have recently been boosted by investors' expectations that President-elect Trump's policies will boost economic growth, partly due to anticipated tax cuts.

According to a report by Morningstar Indexes (Morningstar Indexes) strategist Dan Lefkovitz earlier this month, small-cap stocks are mainly focused on “domestic-focused and economy-sensitive” market sectors, including financial services, basic materials, consumer cycles, and real estate, which are thought to be likely “under Trump's policy Excellent performance”.

Within days of the November 5 presidential election, Jefferies analysts pointed out in a stock report that interest rate trends will determine the sustainability of post-election small-cap gains .

Interest rates in the bond market fell on Monday. According to Dow Jones market data, as of 3 p.m. ET, the 10-year Treasury yield — the benchmark interest rate for measuring stock valuations — fell 14.7 basis points to 4.262%, from The biggest one-day decline since August 2.

Small-cap stocks rallied sharply on Monday as treasury yields retreated. The Russell 2000 rose 1.5% to close at 2442.03, according to FactSet data. This increase surpassed the moderate 0.3% increase of the S&P 500 on the same day and brought the Russell 2000 close to 11 in 2021 An all-time closing high of 2442.74 points was set on January 8th.

Meanwhile, the S&P 500 has hit record highs several times this year, reaching 51st place on November 11, 2024 The highest closing price in history.

According to Dow Jones market data, historical data shows that the Russell 2000 index is likely to rise further in December. With an average return of 2.8% in December, the Russell 2000 Index was the best performing month of the year.

Although the increase in the Russell 2000 Index since 2024 is about 5 percent lower than 25.5% of the S&P 500 Points, but the performance of exchange-traded funds (ETFs) targeting small-cap growth was closer to the S&P 500 increase.

According to FactSet data, as of Monday, the Vanguard small-cap growth ETF, which tracks the US small-cap growth stock index, has risen 24.8% this year, while The iShares Russell 2000 Growth ETF rose 24.7% over the same period.