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Russell 2000 Edges Higher As Small-Cap Stocks Navigate Fed Rate Hike Fears And Bond Yield Swings

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FTSE 100 Surges 0.8% Today as Oil Eases and Markets

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.

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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.

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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.

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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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B&Q and Five Guys among 658 firms named

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B&Q and Five Guys among 658 firms named

More than 650 businesses, including B&Q, Five Guys and Serco, have been named by the government for failing to pay some of their employees the minimum wage. The 658 employers on the list have repaid a total of about £4m to more than 27,000 workers.

The Department for Business & Trade published the list on 3 September and said the repayments followed “robust” enforcement action. Ministers said penalties totalling £7m had been issued to employers found not to be paying the legal minimum.

Jonathan Reynolds, the business secretary, said: “Short-changing your staff isn’t a shortcut to success and we are determined to stamp it out.”

Kate Dearden, minister for the future of work, said: “Underpaying your staff is illegal, and we will not let workers foot the bill for their boss failing to follow the rules.”

The government said it was committed to publishing naming lists more regularly so that employers were swiftly held to account and made improvements as quickly as possible. A previous naming round covered 239 employers who underpaid 22,400 workers a total of £1.44m.

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B&Q tops the list

B&Q, the DIY retailer, was at the top of the list after failing to pay 4,530 workers correctly, owing them a total of £456,934. The company said the shortfalls in payments were “unintentional” and “related to calculations involving geographical allowances which are paid in addition to minimum hourly rates”. The affected employees were paid in full in July 2025, the company said.

Elysium Healthcare Holdings 3 Limited was second on the government’s list, owing £330,048 to 1,095 workers. St George’s, Epsom and St Helier Hospital Group owed £123,331 to 75 workers, while Support Staff Services Limited owed £119,715 to 323 workers and Forest Holidays owed £100,308 to 598 workers.

Five Guys, the burger chain, was named for underpaying almost 3,700 of its workers a total of £54,642. “Following an HMRC review, technical differences in how payroll regulations were applied affected our national minimum wage calculations, resulting in a shortfall of approximately £55,000 across a payroll of more than £330 million,” the company said. It added that it had paid all current and former staff affected.

Serco underpaid 374 staff a total of £36,303. A spokesman for the outsourcer, which provides services to asylum hotels, defence programmes, hospitals, schools, offices and prisons, said the shortfall came from a technical error that affected one contract more than two years ago and related to salary sacrifice schemes. “It was quickly rectified once identified and all employees were reimbursed in full,” Serco said.

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Whitbread, the owner of the Premier Inn hotel chain, appeared on the list after failing to pay 342 employees a total of £4,193. The FTSE 100 company said the shortfall was caused by an administrative error which has since been rectified.

Rates rose in April

The minimum wage, known as the national living wage for those aged 21 and over, was introduced more than 20 years ago. The rate for over-21s rose to £12.71 an hour on 1 April 2026, with the rate for 18 to 20-year-olds increasing to £10.85 and the rate for under-18s and apprentices set at £8.00. The rates change on 1 April every year, according to the government.


Amy Ingham

Amy Ingham

Amy Ingham is a reporter at Business Matters, covering UK business news with a focus on breaking news, business policy, late payments and insolvency. She joined the magazine in 2026 after completing the NCTJ Diploma in Journalism at Harlow College’s journalism school. Her recent reporting includes British Steel’s nationalisation and its impact on SME suppliers, the decline in late payments by large firms, and Insolvency Service director disqualifications. Reach her at aingham@cbmeg.co.uk.

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Travis Kelce Opens Up About Wedding To Taylor Swift, Calls Adam Sandler ‘Best Person On This Planet’

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Travis Kelce shared new details about his July wedding to Taylor Swift during the Season 5 premiere of his podcast, offering fans their most extensive look yet at the private, star-studded celebration and gushing over comedian Adam Sandler’s decision to officiate the ceremony.

Kelce, the Kansas City Chiefs tight end, discussed the wedding at length on the Sept. 2 episode of “New Heights,” the podcast he co-hosts with his older brother and retired NFL star, Jason Kelce. Swift and Kelce married on July 3 at Madison Square Garden in New York City in a ceremony attended by roughly 1,000 guests, following a wedding-planning process that had been kept largely under wraps despite intense public interest.

“It’s a night out we’ll never forget,” Travis said of the celebration.

Describing the event further, Travis called it “a magical, magical night,” reflecting on how quickly the evening seemed to pass despite the months of anticipation surrounding it.

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“It was insane. It’s a night we’ll never forget,” Travis said. “Me and Taylor are so thankful for everyone that showed up, from the vows to just seeing everyone to how much fun we had throughout the entire evening and hearing that be relayed through everybody’s stories of the night. It was just so magical, man, and I wish that it could have lasted even longer than it did. It felt like it just happened in the blink of an eye.”

Much of Travis’s discussion centered on Sandler, who officiated the ceremony after getting ordained specifically for the occasion, a choice Travis said was something he and Swift had wanted from the outset.

“He has been just the f—ing best person on this planet,” Travis said of Sandler on the podcast.

Sandler’s role as officiant surprised many observers when it was first confirmed in a press release issued the night of the wedding, which noted that the couple did not have traditional bridesmaids or groomsmen. Instead, Swift’s brother, Austin Swift, served as her Man of Honor, while Jason Kelce served as Travis’s Best Man, with the ceremony officiated by the couple’s friend, Adam Sandler.

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Sandler’s connection to the couple dates back several years. He worked directly with Travis on the set of “Happy Gilmore 2,” the Netflix sequel released last year, in which Travis had a cameo appearance as a waiter. Following the film’s release, Travis publicly thanked Sandler on Instagram, writing that the opportunity still felt surreal and expressing gratitude toward him. Sandler, for his part, has spoken warmly about Travis in multiple interviews since then, telling Entertainment Tonight that Travis reminded him of friends he grew up with and describing him as “a great actor and a great human.”

Sandler has also expressed admiration for Swift specifically. Appearing on “New Heights” in August 2024, Sandler told Kelce directly how much he admired Swift’s music and the broader impact of her career.

“She means so much to our house,” Sandler said at the time. “I love listening to her in the car. I love what she has to say, every message, every melody. The production. How cool she was. What she meant to young girls. What she means to women. What she means to guys doing the right thing in life.”

Sandler also described a moment of foreshadowing from months before the couple’s engagement, recalling a conversation about writing Travis into a role resembling family.

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“I was thinking, we were talking about you playing my son while we were writing it literally like six months ago,” Sandler said. “We were like, ‘Imagine if Travis was my first baby, how funny that would be.’”

Kansas City Chiefs head coach Andy Reid, who attended the wedding as one of the roughly 1,000 guests, later offered his own account of Sandler’s performance as officiant in an interview with CNN, describing the speech as striking a careful balance between humor and sincerity.

“Adam Sandler did a phenomenal job with the ceremony,” Reid said, adding that Sandler brought “a little bit of humor and a bit of sensitivity to what was going on. There was a lot of people from different worlds, and he brought them all together.”

Reid also revealed some of the specific advice Sandler offered the newlyweds during the ceremony.

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“Kiss every chance you have. Every day. Whether you’re going to bed or going to work. Whenever, go ahead and kiss her,” Sandler told the couple, according to Reid’s account.

The guest list for the wedding reportedly included a wide range of prominent figures from music, film and sports, including Selena Gomez, Lena Dunham, Zoë Kravitz, Karlie Kloss, Gigi Hadid, Ed Sheeran, the Haim sisters, country stars Brad Paisley and Miranda Lambert, along with numerous NFL figures connected to Travis’s football career.

Details about the wedding’s specific theme and catering have gradually emerged in the weeks since the ceremony, with reports indicating the celebration featured an enchanted-garden theme alongside arcade-style catering options for guests. Swift’s publicist previously confirmed that both Swift and Travis wore custom Christian Dior outfits for the occasion, paired with Christian Louboutin shoes and Cartier jewelry for Swift, though Swift herself has not yet publicly commented on the wedding or released official images from the event.

Travis had previously described the wedding as “the best night of my life” during an Aug. 12 Chiefs press conference, thanking everyone who attended and celebrated with the couple. His latest podcast comments build further on that sentiment, offering fans additional insight into both the emotional significance of the night and the close friendship between the newlyweds and Sandler that ultimately led to his role at the center of the ceremony.

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Swift and Travis announced their engagement on Aug. 26 of the prior year, following roughly two years of dating that had drawn significant public and media attention, given Swift’s global music career and Travis’s prominence as a star tight end for the Chiefs. Their subsequent wedding, held nearly a year after the engagement announcement, capped what became one of the most closely followed celebrity relationships of recent years, culminating in a ceremony that combined figures from Swift’s music and entertainment circles with Travis’s football and broader sports world connections.

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