Small-cap U.S. stocks, which have been trailing behind their large-cap peers this year, showed a strong performance on Tuesday following the release of data indicating flat inflation in October.
Russell 2000 Surges
The Russell 2000 (RUT), comprising the 2,000 smallest companies by market capitalization in the Russell 3,000, experienced a significant surge of 81.79 points, or 4.8%, reaching around 1,787 in late morning trading on Tuesday as per FactSet data.
Best Day Since Nov. 10, 2022
According to Dow Jones Market data, this performance indicates that the index is on track for its most exceptional day since November 10, 2022, when it achieved a remarkable rise of 6.1%.
Small-Cap Stocks Struggle This Year
In contrast to their large-cap counterparts, small-cap stocks have faced challenges this year. The Russell 2000 has only gained 1.6% year-to-date compared to the significant 17.2% increase in the S&P 500 (SPX), a benchmark for large-cap stocks, and the impressive 34.5% return of the technology-heavy Nasdaq Composite (COMP).
One-Day Outperformance Against Nasdaq Composite
Nevertheless, on Tuesday, the Russell 2000 outperformed the Nasdaq Composite by 2.50 percentage points, marking its largest one-day outperformance since June 7 when it surpassed by 3.07 percentage points.
Broad Market Gains
In broader market movements on Tuesday, U.S. stocks showed positive momentum. The Dow Jones Industrial Average (DJIA) rose by 1.7%, while the S&P 500 gained 2.1%, and the Nasdaq Composite increased by 2.3%.