Small-cap stocks have outshined their bigger peers so far this year on Wall Street.
Seth Wenig/AP
US small-cap stocks suffered in the first COVID wave but are now powering ahead.
The Russell 2000 index has jumped more than 10% in 2021 already.
A number of factors, from stimulus to vaccines to tech regulation, could push them higher.
The stock market recovery from the coronavirus crash in the spring of 2020 was all about the biggest US names: Amazon, Apple, Facebook, Google, and Netflix.But the smaller, more unloved parts of the stock market come roaring back in the autumn and winter, and their momentum has continued in 2021. The
Russell 2000 index of small-capitalization stocks has jumped 1.5%, for example. Small-caps have had "a tremendous rebound," says James Gowen, chief investment officer at Spouting Rock Asset Management in Pennsylvania. He said earnings expectations have "really started to come up."So, can this tremendous rebound continue? There are clouds on the horizon: COVID-19 infections and deaths are still rising around the world, while vaccine rollouts have
not always gone smoothly.
