Small-cap performance improves as investors focus on economic growth and interest rate outlook

Investors may be turning to small-cap stocks as large-cap tech stocks are reportedly generally pulling back. Traders continue to focus on corporate earnings reports. Billionaire investors said the recent improvement in small-cap performance has benefited from better-than-expected labour market conditions and increased expectations of a Fed rate cut. the Russell 2000 Index rebounded from its lows, with strong performance in the banking sector further supporting small-cap stocks. Despite the improvement in absolute performance, the Russell 2000 to S&P 500 ratio chart remains in a downtrend. goldman Sachs says the equity market sell-off has cancelled out and the year-end rally is resonating with clients.