The Nasdaq-100 is back at all-time highs after a late-June tech surge. On July 9, the index climbed to 22,884 as chipmaker Nvidia soared — becoming the first U.S. company to cross the $4 trillion market cap mark amid renewed AI optimism.
Let’s face it — small caps haven’t had it easy. While mega-cap tech stocks were busy driving the S&P 500 to all-time highs, smaller companies were stuck playing second fiddle. Since 2015, the Russell 2000 has delivered less than half the gains of its large-cap counterpart.
Last week’s macro backdrop showed cooling inflation but softening demand. US retail sales unexpectedly declined by 0.9% in May — the biggest drop in four months — hinting at consumers pulling back amid high rates and lingering price pressures.
Back in 2022, the US central bank – the Federal Reserve – began raising interest rates quickly to fight inflation. Rates went from nearly 0% to over 5% in just over a year.
Last week, investors were navigating a delicate balance between relief and risk. On one hand, US inflation data brought some welcome news – prices are rising more slowly than expected, giving the Fed more reason to hit pause on rate hikes.
