The small-cap rally just got real. The Russell 2000, America’s small-cap benchmark as tracked by the iShares Russell 2000 ETF IWM, just smashed through old records, hitting 2,470 points on Thursday and topping its November 2024 high.
The move came one day after the Federal Reserve cut interest rates by 25 basis points, and hinted that more cuts could be coming soon—a clear green light for small, interest-rate-sensitive companies.
Chart: Small Caps Smash Prior Records Set In November 2021 And 2024
It’s a notable reversal for a part of the market that’s lagged for much of the post-COVID bull run.
But since the April’s tariff-driven selloff, small caps have rallied 43% outperforming the S&P 500’s 37% gain. Since the August lows, small caps have outperformed the Nasdaq 100 – tracked by the Invesco QQQ Trust QQQ – by nearly 8%, as Jeff Jacobson, analyst at 22V Research, highlighted in an emailed note.
“That trend could extend if rates continue to decline,” Jacobson added.
The Federal Reserve’s decision to lower rates to a 4.00%–4.25% target is already having ripple effects. Small caps—often the first beneficiaries of easier financial conditions—are now center stage.
Cheaper borrowing costs give smaller companies a fighting chance. These firms often carry higher debt loads and rely more heavily on credit to fund growth, making rate cuts especially impactful.
In its latest Summary of Economic Projection, the Fed pencilled in the potential for two more cuts in the remaining two meetings of the year and a further cut next year.
Russell 2000 Stocks That Exploded 20%+ On Thursday
Here’s a look at eight of Thursday’s biggest small-cap winners—each gaining more than 20% as the Russell 2000 surged:
| Stock Name | % Change | What They Do |
|---|---|---|
| 89bio Inc. ETNB | +85.5% | Biotech firm focused on liver and cardio-metabolic diseases. Surged after positive trial data for its NASH treatment. |
| Quantum-Si Inc. QSI | +27.4% | A protein sequencing company aiming to revolutionize next-gen diagnostics. Shares rose on biotech momentum. |
| Intellia Therapeutics NTLA | +23.8% | CRISPR-based gene editing company. Rally driven by renewed excitement in gene therapy. |
| Ramaco Resources METC | +22.1% | Coal miner specializing in metallurgical coal used in steelmaking. Gained on commodity strength. |
| Humacyte Inc. HUMA | +21.9% | Makes bioengineered blood vessels and regenerative tissue. Jumped on regulatory progress. |
| Butterfly Network BFLY | +21.8% | Developer of handheld ultrasound devices. Benefited from rising medical tech adoption. |
| New Fortress Energy NFE | +21.5% | Operates natural gas infrastructure and LNG supply. Surged as energy stocks caught a tailwind. |
| Acuren Corporation ACRN | +20.9% | Industrial services provider offering inspection, testing, and engineering. Rose after contract wins and strong outlook. |
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