U.S. small-cap stock performance is soaring in the second half of 2025, with the benchmark S&P Small Cap 600 Index up 10.7% in the last three months and up 4.1% over the past 30 days. The broader large-cap S&P 500 Index is up just 8.9% and 1.8% over the same time periods.
Small-caps should rise even further if, as expected, the Federal Reserve cuts interest rates at the Fed's Open Markets Committee in mid-September. A .25% cut in the benchmark federal funds rate is a “done deal,” according to a Reuters survey of 107 economists, which would be good news for U.S. small-cap companies looking for lower credit and borrowing rates.
