The S&P 600 Is About to Do This for the First Time in Years. It Could Lead to a Huge Rally for Small Caps.

It goes without saying that megacap tech has been the dominant U.S. equity strategy for the past several years. Small caps, often touted as diversifiers and stocks with above-average return potential, have been consistent laggards since 2021. They last peaked relative to the S&P 500 (SNPINDEX: ^GSPC) about a decade ago. The chart demonstrates this, using the iShares Core S&P Small Cap ETF (NYSEMKT: IJR), which tracks the S&P 600, and the iShares Core S&P 500 ETF (NYSEMKT: IVV). Will AI create the world's f ...