Russell 2000 Continues to Outperform S&P 500 and Nasdaq
The Russell 2000 has been on a winning streak since the third quarter of 2024, outperforming major indices like the S&P 500 and Nasdaq. In November alone, the Russell 2000 saw a stellar performance with a monthly gain of 10.8%, leaving the S&P 500 (5.7%) and Nasdaq 100 (5.2%) trailing behind. The Dow Jones Industrial Average also joined the party with a 7.5% gain in the same month.
Trump’s "America First" Policy Boosts Russell 2000 Performance
The recent surge in the Russell 2000 can be attributed to the incoming Trump administration’s "America First" policy. With promises of corporate tax cuts and deregulation, coupled with trade tariff threats towards major economies, small-cap companies listed on the Russell 2000 are set to benefit. These companies generate a significant portion of their revenue domestically, shielding them from potential international headwinds.
Technical Analysis Supports Continued Growth
From a technical perspective, the US Russell 2000 CFD Index is showing strength with upward-sloping 50-day and 200-day moving averages. This indicates that the medium-term and major uptrend phases are still intact. Keeping an eye on the key support level at 2,288 and a breakout above the 2,450 resistance level could signal further upside potential. However, a failure to hold the support level may lead to a corrective decline.
In Summary
- The Russell 2000 has been outperforming major indices like the S&P 500 and Nasdaq since Q3 2024.
- The Trump administration’s policies and trade tariff threats are providing tailwinds for small-cap companies on the Russell 2000.
- Technical analysis suggests that the Russell 2000 is in a strong uptrend, with key support and resistance levels to watch for potential price movements.
By keeping track of these key factors and understanding the market dynamics, investors can make informed decisions to navigate the ever-changing financial landscape and potentially capitalize on the opportunities presented by the Russell 2000’s continued outperformance.