Wall Street enjoyed a broad rally on Tuesday with most parts of the market participating in the climb higher. One group of stocks had an especially strong day: small-caps.
The Russell 2000 rose 1.8% in what was set to be its best day in more than two months, according to Dow Jones Market Data. Despite Tuesday’s notable strength, the small-cap index maintained its six-day streak of trading below its 200-day moving average, its longest streak in more than a year. The index has increased nearly 12% since the start of the year.
Gains in small caps didn’t mean large-cap names were struggling, however. The Dow Jones Industrial Average rose 1%, or 531 points. The S&P 500 gained 0.3%. The Nasdaq Composite was roughly flat.
“Investors are just taking a little bit more comfort and rotating out of those [AI] stocks and into areas that have done a little bit better more recently,” says Patrick Ryan, Madison Investments’ chief Investment strategist, about Tuesday’s moves into small-caps and other laggards. This benefited defensive areas of the market as well. In fact, the healthcare led the rally on a sector level.
Tuesday’s gains were widespread, but the tech sector did struggle to find its footing. The S&P 500 information tech sector spent most of the day wavering near the flatline, signaling tech stocks were looking for direction.
There will be no shortage of catalysts to drive tech stocks with SpaceX earnings on deck after Tuesday afternoon, with Meta and Tesla results slated for Wednesday.
