The Russell 2000 index, tracking small-cap US companies, achieved an intraday record high on Thursday (Friday AEST). The index surpassed its previous all-time intraday high of 2466.49 points, which was reached on November 25, 2024. The index was last recorded at 2466.86 points and was poised to exceed its record closing value of 2442.74 points from over three years ago.
The Russell 2000 has demonstrated a strong recovery, climbing approximately 42 per cent from its low on April 7. Investor anxieties surrounding President Trump’s widespread tariffs had initially triggered market volatility and a sell-off of riskier assets, significantly impacting the index at that time.
Keith Buchanan, senior portfolio manager at Globalt Investments, noted the recent underperformance of small caps and suggested a potential “catch-up trade” is underway. Buchanan stated, “we see the environment that we are in, being conducive for the rally in small caps to continue.” The broader market recovery, including the S&P 500 and Dow indices, has been attributed to a limited impact of tariffs on the US economy and trade agreements with key partners, alleviating investor concerns.
Additionally, anticipations of the Federal Reserve’s initial interest rate cut of the year have contributed to the market’s resurgence. This expectation has further bolstered the recovery of the Russell 2000 index and the broader stock market, creating a more favourable environment for small-cap companies.
