
The 2023 bull market, led by large-cap tech stocks, changed momentum this year to benefit smaller companies due to several economic trends, like the slowing rate of inflation growth that is driving up bets on a September rate cut by the US Federal Reserve.
According to TipRanks, Goldman Sachs chief US equity strategist David Kostin cited factors like declining inflation, steady economic growth, heightened market probability of a Republican sweep, and "forecast compression in the EPS growth premium of large-cap stocks vs. peers" that are driving the reversal "against a backdrop of extreme equity market concentration."