Will the Russell 2000 Continue to Outperform the S&P 500?

Group 1 - AI spending and advancements have led to the emergence of the "Magnificent Seven," which includes Nvidia, Microsoft, Apple, Alphabet, Amazon, Meta Platforms, and Tesla, significantly impacting market returns and contributing to the outperformance of the large cap S&P 500 Index over the small cap Russell 2000 Index for the past five years [1] - The Russell 2000 Index has gained over 7% at the start of the year, outperforming the S&P 500 Index, which only gained just over 2% [2] - The recent 14-day win streak for the Russell 2000 Index is the second longest on record, indicating a potential trend in small-cap outperformance [3] Group 2 - Following a win streak of at least eight consecutive trading days, the Russell 2000 Index has averaged a 2.72% return in the month after, with 79% of the returns being positive and outperforming the S&P 500 Index 74% of the time [4] - The S&P 500 Index, after similar win streaks, has shown a short-term average gain of 1.49% in one month, but underperformed in the six-month period with an average loss of -0.36% [7][8] - Both the Russell 2000 and S&P 500 Indexes exhibit momentum immediately after small-cap outperformance streaks, but tend to pull back and become more volatile around the three-month mark, ultimately nearing breakeven after six months [9][10]