Why the record rally for small-cap stocks could run into a big problem in 2026

Core Insights - Rising Treasury yields may pose challenges for small-cap companies, but there are signs of improving fundamentals in the sector [1] Group 1: Market Conditions - The increase in Treasury yields could hinder the performance of small-cap stocks, which are typically more sensitive to interest rate changes [1] - Despite the potential roadblocks, there is a noted improvement in the fundamentals of small-cap companies, indicating a possible recovery [1] Group 2: Investment Outlook - One money manager suggests that the current environment may create both challenges and opportunities for investors focusing on small-cap stocks [1]