11 fast-growing small-cap stocks that could get a boost from the Fed’s next move

Core Viewpoint - Investors are anticipating a potential cut in the federal-funds rate by the Federal Open Market Committee, which may act as a catalyst for small-cap U.S. companies, particularly due to their focus on domestic sales and the potential for reduced borrowing costs [1]. Group 1: Market Performance - Small-cap stocks have underperformed compared to large-cap stocks this year and over the past five years, but the situation may change with expected interest rate cuts [1]. - The S&P 500 has outperformed the S&P Small Cap 600 over the past five years, although the small-cap index led for a significant portion of that period [5]. Group 2: Investor Sentiment - Jay Woods, chief global strategist at Freedom Capital Markets, suggests that excessive volatility may follow the Federal Reserve Chair's press conference, but any potential selloff in small-caps could lead to a rally later in the year [2]. - Momentum in the Russell 2000 index could indicate a stronger bull market than anticipated if it breaks out to new highs [2]. Group 3: Index Criteria and Screening - The S&P Small Cap 600 requires companies to show four consecutive quarters of profitability for initial inclusion, making it a more conservative benchmark compared to the Russell 2000 [5]. - A screening of the S&P Small Cap 600 highlights companies with rapid revenue growth and those expected to grow quickly through 2027 [4].