Oracle Corporation

Strong employment data and revised estimates of US GDP growth for the second quarter cooled investor optimism a bit

'Markets a little tired': US stocks break three-week streak of gains

WisdomTree, Inc.

DeFi Development Corp.

OSL Group Limited

In early April, the House Financial Services Committee voted to advance a U.S. stablecoin bill. By July, it had passed both chambers of Congress and was signed into law by President Trump. The GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins) is the first federal regulatory framework in U.S. history for stablecoins, which are dollar-backed digital assets designed to maintain a fixed value.

U.S. GENIUS Act: Small caps that will benefit from the new stablecoin regulation

The small- and mid-cap tracking Russell 2000 index rose to a record high yesterday, September 18, refreshing the previous high mark from 2021. It came a day after the Fed cut interest rates. The Russell 2000 is the "clear winner" from the Fed decision,&nbsp;<a href="https://www.channelchek.com/news-channel/russell-2000-surges-to-record-levels-as-fed-rate-cut-fuels-small-cap-rally">says</a>&nbsp;Noble Capital Markets in a note. Analysts expect the rally to continue, but fear markets may be overheating.

Russell 2000 is 'clear winner' from Fed rate cut, reaches new all-time high

The long-expected cut helped propel the Russell 2000 higher, even as the broader market finished the day lower

'Fragile rally': Russell 2000 falls short of all-time high after Fed rate cut

Corcept Therapeutics Incorporated

LTC Properties, Inc.

Goosehead Insurance, Inc.

MarketWatch has <a href="https://www.marketwatch.com/story/11-fast-growing-small-cap-stocks-that-could-get-a-boost-from-the-feds-next-move-424328aa">compiled</a>&nbsp;a list of 11 fast-growing small-cap stocks from the S&amp;P SmallCap 600 that could get a boost from the Fed’s next move. Wall Street forecasts that their earnings will continue to rise at least through 2027, a pace three times faster than the average for index companies.

MarketWatch names 11 fast-growing small caps set to outperform amid Fed rate cuts

The Russell 2000 index, which tracks small- and mid-cap stocks, has <a href="https://finance.yahoo.com/quote/%5ERUT/">risen</a>&nbsp;5% over the last month and could soon <a href="https://www.barrons.com/articles/small-cap-stocks-rally-russell-2000-88aac4b9?refsec=small-caps&amp;mod=topics_small-caps">surpass</a>&nbsp;its 2021 record. Some Wall Street strategists <a href="https://www.bloomberg.com/news/articles/2025-09-12/wall-street-expects-rally-in-riskiest-stocks-to-last-12-months?embedded-checkout=true">believe</a>&nbsp;the rally is just beginning, while others <a href="https://www.barrons.com/articles/small-cap-stocks-rally-russell-2000-88aac4b9?refsec=small-caps&amp;mod=topics_small-caps">argue</a>&nbsp;these companies may struggle to sustain momentum amid a sluggish economy.

Russell 2000 nears record high: How long can the small-cap rally last?

Chart Industries, Inc.

Lumen Technologies, Inc.

Badger Meter, Inc.

The second quarter opened with a rout after U.S. President Donald Trump announced his tariff plan on April 3, with tariffs to be raised several dozen percentage points. The S&amp;P 500&nbsp;<a href="https://www.reuters.com/markets/sp-500-loses-24-trillion-market-value-biggest-one-day-loss-since-2020-2025-04-03/#:~:text=April%203%20(Reuters)%20%2D%20S%26P,tailspin%20on%20March%2016%2C%202020.">erased</a>&nbsp;$2.4 trillion in value in a single day, the steepest one-day loss since the pandemic. Small-cap stocks were hit harder by the selloff. Between April 2 and April 8, the small- and mid-cap Russell 2000 plunged 14%, versus a 12% decline in the large-cap S&amp;P 500.

Freedom Finance Global: Hedge funds trim health care, add to cyclicals and tech in 2Q

Aeva Technologies, Inc.

Applied Digital Corporation

Pagaya Technologies Ltd.

NVIDIA Corporation

The excitement around artificial intelligence is heating up not only the securities of technology giants. Against the background of record quarterly reports of Big Tech and growing optimism of Wall Street, investors are finding undervalued ideas in the small capitalization segment. The biggest gainers are companies creating infrastructure for AI development - from building data centers to supplying specialized equipment and solutions.

Not just Big Tech: Which small-cap companies are benefiting from the development of AI

In the weeks ahead, the Russell 2000, the benchmark for U.S. small-cap stocks, may continue to <a href="https://www.bloomberg.com/news/articles/2025-08-25/bofa-ubs-see-small-cap-outperformance-as-powell-turns-dovish?embedded-checkout=true">outperform</a>&nbsp;large-cap peers. In remarks in Jackson Hole on Friday, August 22, Fed Chair Powell <a href="https://en.oninvest.com/article/s-amp-p-500-posted-its-best-gain-since-ma-dow-has-first-record-of-the-year-powell-inspired-the-market">signaled</a>&nbsp;that interest rates could be cut as early as September. The remarks lifted all major equity indexes, while the iShares Russell 2000 ETF <a href="https://www.bloomberg.com/news/articles/2025-08-25/bofa-ubs-see-small-cap-outperformance-as-powell-turns-dovish?embedded-checkout=true#:~:text=Investors%20responded%20accordingly%2C%20injecting%20the%20most%20cash%20into%20the%20iShares%20Russell%202000%20ETF%20since%20November.">drew</a> its largest inflows since November 2024.

BofA, UBS eye small-cap outperformance after Powell's dovish remarks

For the sixth month now, U.S. President Trump has been waging a zigzagging trade war. Since “Emancipation Day” on April 2, when he announced the <a href="https://www.cnbc.com/2025/04/03/us-tariff-rates-under-trump-will-be-higher-than-the-smoot-hawley-levels-from-great-depression-era.html">largest tariffs</a> in nearly a century, several countries, including the <a href="https://www.nytimes.com/2025/05/07/business/economy/trump-trade-britain.html">UK</a>&nbsp;and <a href="https://www.reuters.com/business/trump-strikes-tariff-deal-with-japan-auto-stocks-surge-2025-07-23/">Japan</a>, along with the <a href="https://www.cnbc.com/2025/07/27/trump-european-union-eu-trade-tariffs.html">EU</a>, have already managed to get a deal done to reduce the new tariffs. On August 11, Trump temporarily <a href="https://oninvest.com/article/tramp-prodlil-na-90-dnej-dedlajn-dla-povysenia-poslin-v-otnosenii-kitaa-smi">delayed</a>&nbsp;the introduction of tariffs on Chinese goods. During this period, shares of large companies climbed to new highs, while the weakness of small-cap stocks became more apparent.

Tariffs weigh on small caps, investors ponder next moves

Alphabet Inc.

Intel Corporation

UnitedHealth Group Incorporated

Berkshire Hathaway Inc.

US and Russian Presidents Donald Trump and Vladimir Putin held talks on Ukraine in Alaska on Friday. On his way to Anchorage, Trump told reporters that duties on chip imports could reach 300%. Earlier in the week, USA stock markets rose to new records amid expectations of a Fed rate cut. Perplexity unexpectedly offered to buy Google's Chrome browser, and the US administration is exploring buying a stake in Intel. Sam Altman is preparing to launch a startup that will become a competitor of Elon Musk's Neuralink - the rivalry between them is intensifying. The main events of August 11-15 are in our review.

Highlights of the week: US-Russia summit, White House and Intel stake, buyer for Chrome

Small caps are again the spotlight, but not because they are outperforming. According to Refinitiv Lipper data as of August 4, investors have pulled $94.7 billion from U.S. small-cap funds since the start of the year, including $47.3 billion in July alone – the largest monthly outflow in 5 years. That figure also far exceeds the total for the second quarter, when withdrawals reached $30.3 billion, the highest quarterly outflow since 2020. Despite occasional rallies, small caps have trailed large caps by a wide margin. In the first seven months of the year, the S&amp;P 500 rose about 6.5%, while the Russell 2000 fell roughly 1.0%.