Small-Cap Stocks Gain Ground Amid Market Rotation in Second Half of 2024

Over the last several weeks, small-cap stocks and indexes have shown gains as a market rotation takes place in the second half of 2024. The iShares Russell 2000 ETF (ARCA:IWM) has seen strong performance, outperforming major stock market indexes. The ETF is up 10.9% in the last month, significantly surpassing the returns of other popular ETFs like the SPDR S&P 500 ETF (SPY) and the Invesco QQQ Trust (QQQ). Despite the recent surge in small-cap stocks, a new Benzinga poll indicates that investors are showing confidence in this segment. Out of the respondents, the majority stated that they are buying more small-cap stocks, with only 1% saying they are buying fewer.

The poll conducted by Benzinga in July 2024 included responses from a diverse population of adults aged 18 or older. The results demonstrated that a significant number of investors are optimistic about small-cap stocks, which have been performing well compared to large-cap stocks, particularly in the technology sector. Even though the Russell 2000 index is still 8% below all-time highs, experts believe there is potential for further upside. Freedom Capital Markets Global Strategist Jay Woods highlighted the 8% gain for the Russell 2000 as an achievable target, signaling continued optimism in the small-cap space.

Investors have been closely monitoring the performance of various ETFs tracking major stock market indexes, with small-cap stocks increasingly becoming a focal point due to their recent strong performance. The rising interest in small caps from investors, as indicated by the poll results, suggests that the rally in this segment could persist or even gain momentum in the coming weeks. Overall, the sentiment towards small-cap stocks appears somewhat bullish, emphasizing the continuing importance of monitoring this sector for potential investment opportunities.