In early 2026, small-cap stocks outperformed major indices, with the Russell 2000 Index rising over 6% in January, due to investors selling off large tech stocks. Analysts attribute this round of gains to low interest rates, the resilience of the US economy, and attractive valuations, with the P/E ratio of the S&P SmallCap 600 Index trading at a 31% discount to the S&P 500 Index. It is expected that small-cap stocks will see earnings growth of 15.4% this year, outpacing the broader market.