Small-cap stocks are stealing the spotlight as we close out 2024, riding high on a perfect storm of political and economic tailwinds. Donald Trump's re-election has sent ripples through the market, with his pro-business agenda sparking a rally that's lifting small companies to new heights.
The Russell 2000 Index (RUT), a key barometer for small-caps, broke out to a new three-year peak following Trump's victory, as investors priced in the president-elect's promises of reduced corporate taxes, favorable tariffs, and deregulation, which are expected to particularly benefit domestically focused small-caps. As we look ahead, many analysts predict these nimble players could continue to outperform, potentially leading the charge into 2025.
