NEW YORK — The Russell 2000 Index, the benchmark tracking small-cap U.S. stocks, edged higher Thursday morning, trading at 2,964.50, up 11.33 points, or 0.38%, as of 9:55 a.m. ET, as investors weighed a modest pullback in Treasury yields against lingering concerns over the Federal Reserve’s next interest rate move.

Thursday’s gain came as the broader stock market extended its rebound from a rocky start to the week, with the S&P 500 and Dow Jones Industrial Average also trading higher amid easing bond yields and news of a major acquisition by chipmaker Nvidia. The benchmark 10-year Treasury note yield eased to around 4.75%, pulling back after touching its highest level since November 2023 earlier in the week, offering some relief to small-cap stocks, which tend to carry higher debt loads and greater sensitivity to borrowing costs than their large-cap counterparts.

Despite Thursday’s modest advance, the Russell 2000 has faced meaningful volatility in recent sessions, reflecting broader uncertainty over the direction of Federal Reserve policy. According to market strategist Phil Rosen, writing this week, the index remains up 25% over the trailing 12 months, but has given back ground recently amid growing speculation that the Fed could move to raise interest rates rather than cut them further.

“Small-cap stocks have almost nothing to show for the last four years before this one,” Rosen wrote, noting that the Russell 2000 is up 28% since 2021, with nearly all of those gains arriving within just the past year. Rosen said the rally had largely priced in expectations of lower borrowing costs, but that traders have increasingly begun pricing in the possibility of a Fed rate hike before 2027.

According to data cited by Rosen, futures markets tied to the CME show roughly a two-in-three probability of a rate hike at the Fed’s meeting later this month, a shift in sentiment Rosen attributed in part to a hawkish-leaning speech delivered by Fed official Kevin Warsh at the Jackson Hole symposium the previous week.

“Since Warsh spoke last week, the 2-year Treasury yield has climbed to its highest level since 2023 while the Russell 2000 has fallen more than 3 percent, a steeper drop than the S&P 500’s 1.3 percent,” Rosen wrote, underscoring the outsized sensitivity small-cap stocks have shown to shifting rate expectations compared with larger, less leveraged companies.

Small-cap companies are widely viewed as more exposed to changes in benchmark interest rates than their large-cap peers, given their comparatively higher reliance on debt financing and floating-rate borrowing structures. According to estimates from Bank of America cited by Rosen, every 25-basis-point increase in the Fed’s benchmark rate reduces Russell 2000 operating earnings by roughly 2%, illustrating the direct earnings impact that even modest policy shifts can have across the small-cap universe.

Rosen also flagged a potential warning sign embedded within this year’s rally, noting that unprofitable companies within the Russell 2000 have actually outperformed their profitable counterparts during the run-up, a pattern some market watchers view as indicative of speculative excess rather than fundamentally driven gains, and one that could leave the index particularly vulnerable if borrowing costs rise further.

Thursday’s modest rebound in small-cap stocks followed a similarly positive session Wednesday across the broader market, when the Dow Jones Industrial Average rose 295.07 points, or 0.56%, and the S&P 500 and Nasdaq each gained roughly 0.5%, snapping a three-day losing streak that had been driven largely by concerns over elevated bond yields and rising oil prices tied to the ongoing conflict between the United States and Iran.

Historical performance data compiled by asset managers has generally painted small-cap stocks as significant beneficiaries during Federal Reserve rate-cutting cycles, given their heightened sensitivity to borrowing costs. According to data cited by asset manager ProShares, the Russell 2000 has outperformed the S&P 500 by at least 4% annualized over the one-, two- and three-year periods following each of the last seven Fed rate-cutting cycles. That historical relationship, however, cuts both ways, meaning renewed speculation about a potential rate increase, rather than further cuts, has introduced fresh uncertainty into the outlook for small-cap performance heading into the final months of 2026.

Earlier this year, small-cap stocks had significantly outperformed their large-cap peers, with the Russell 2000 at one point outpacing the S&P 500 by as much as 8 percentage points, according to analysis from Russell Investments. That performance gap has narrowed considerably since, as investor caution tied to developments in the Middle East and shifting interest rate expectations weighed more heavily on smaller, more economically sensitive companies compared with their larger counterparts.

Small-cap valuations, meanwhile, continue to trade at a meaningful discount relative to large-cap stocks, a dynamic some analysts view as a potential source of longer-term opportunity even amid near-term volatility. Analysts tracking the broader small-cap earnings picture have projected earnings growth in the high teens to low 20% range for small-cap companies over 2026 and 2027, though realizing that growth in the face of a potentially higher interest rate environment remains a key point of uncertainty for investors evaluating the space heading into next year.

For now, Thursday’s gain leaves the Russell 2000 modestly higher on the day, even as the index continues navigating a more uncertain macroeconomic backdrop than it faced earlier in the year, when expectations for continued Fed rate cuts had helped drive a substantial rally in small-cap shares. With the Fed’s next policy decision looming later this month, and Friday’s closely watched U.S. labor market report set to offer additional clues on the economy’s trajectory, investors in small-cap stocks are likely to remain focused on incoming economic data and Fed commentary for signals on whether this year’s small-cap rally can find its footing again, or whether renewed rate hike concerns will continue to weigh on the sector in the weeks ahead.

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FUNDAMENTALS

Spot gold held its ground at $4,475.75 per ounce, as of 0040 GMT. Prices jumped 2% ‌on Thursday ⁠as ⁠traders scaled back expectations for a September rate hike after Fed Governor Christopher Waller said he would support leaving rates unchanged if data continued to show inflation pressures moderating.
U.S. gold futures for December delivery fell 0.4% to $4,522.60.

Traders are pricing in an about 50% chance of ​a Fed rate hike later this month, ⁠according to ‌the CME FedWatch Tool.

Though gold is ​often viewed ​as an inflation hedge, elevated interest rates tend ⁠to weigh on the non-yielding asset.

Live Events

The U.S. ​nonfarm payrolls report is due at 1230 GMT.
Data showed the number of Americans filing claims for unemployment benefits rose marginally last week amid low layoffs, pointing to stable labour market conditions.The European Central Bank will likely raise rates on September 10 for the second and final ‌time in what would be its shortest hiking campaign in 15 years, according to a Reuters poll.

Among ​other metals, spot ​silver fell ⁠0.1% to $66.88 per ounce, platinum lost 0.3% at $1,820.18 and palladium declined 0.4% to $1,415.37.

Impala Platinum said on Thursday its annual profit increased more than ​31-fold, driven by higher platinum group metal prices.

DATA/EVENTS (GMT)

0600 Germany Industrial Orders MM Jul

0600 Germany Manufacturing O/P Cur Price SA Jul

0600 Germany Consumer Goods SA Jul

0830 UK S&P Global PMI: MSC Composite Aug

1230 US Non-Farm Payrolls Aug

1230 US Unemployment Rate Aug

1230 US Average Earnings YY Aug

Brent crude futures rose 15 cents, or 0.2%, to $95.67 a barrel at 0100 GMT, while U.S. West Texas ‌Intermediate crude ⁠futures were ⁠up 26 cents, or 0.3%, at $91.56.

On a weekly basis, Brent rose 7.1% and ​WTI was 9.8% higher, set for the highest gains since the week ended ​July 20.

U.S. attacks this week that killed and wounded dozens, including Iranian civilians, marked the fiercest clashes between the two countries since ​July.

The war, which began with U.S.-Israeli strikes ⁠at the ‌end of February, is now in its seventh ​month.

Live Events

Israeli Defence ​Minister Israel Katz renewed warnings that Israel would “cripple” ⁠Iran’s military and civilian infrastructure, including energy facilities.
U.S. Vice ​President JD Vance told reporters on Thursday that ​Washington does not plan to hold talks with Iran unless Tehran stops attacking commercial shipping in the Strait of Hormuz.Capping oil’s advance, however, Russian President Vladimir Putin said there remained a path to a deal to end the war in Ukraine, adding that both ‌the U.S. and China were prepared to support a peace settlement.

Meanwhile, Iran expanded its list of vessels it deems ​non-compliant and ​subject to fines, ⁠confiscation or detention if they attempt to transit the strait. Iraqi ships remain among the few vessels Tehran has cleared to pass through Hormuz.

Iraq ​increased its oil exports to around 2.34 million barrels per day in August from about 1.35 million bpd in July, two Iraqi energy officials said on Wednesday, with September exports also expected to increase as heavy discounts and Iranian approvals for Iraqi tankers encouraged buyers.

Operator

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to Mama’s Creations, Inc. Second Quarter Fiscal 2027 Earnings Conference Call. [Operator Instructions] This conference is being recorded today, Thursday, September 3, 2026, and the earnings press release accompanying this conference call was issued after the market closed today. On our call today is Mama’s Creations Chairman and CEO, Adam L. Michaels, and CFO, Anthony Gruber. Before we get started, I’d like to note that some of the statements on this call will be forward-looking statements that reflect management’s current expectations about future operating and financial results. Although management believes their expectations and assumptions are reasonable, they remain subject to significant risks and uncertainty, and actual results for future periods may differ materially from what is stated or implied during today’s call.

For more information, please refer to the forward-looking statement section in today’s press release and the risk factors disclosed in the company’s most recent Form 10-K and any subsequent reports it files with the SEC. Please also note that today’s call will include a discussion of adjusted EBITDA, which is a non-GAAP financial measure. Important information, including required disclosures containing a reconciliation to the most directly comparable GAAP measure, is also detailed in today’s press release. At this time, I’d like to turn