Core Viewpoint - Small-cap stocks are considered undervalued compared to large-cap stocks, despite a recent rally in their prices [1] Group 1 - Portfolio managers highlight that small-cap stocks remain cheap relative to their large-cap counterparts [1]

Group 1 - The Russell 2000 index closed at a record high for the first time since 2021, increasing by 2.5% [1] - This marks the first closing high since November 8, 2021, and the index set its first intraday record since November 25, 2024 [1] - The record-breaking close ended a stretch of 967 trading days without a record, which is the second-longest streak on record and the longest since a 1,022 trading-day streak that ended in April 2004 [2]

Core Insights - Strategists have raised concerns about the outlook [1] Group 1 - The outlook has been deemed uncertain by strategists [1]

Core Insights - Since early August, the Russell 2000 has outperformed the S&P 500 [1] Group 1 - The Russell 2000 index, which represents small-cap stocks, has shown stronger performance compared to the large-cap S&P 500 index [1]

Market Overview - The market showed resilience despite uncertainties regarding trade policy, tariffs, and the Federal Reserve chair [6] - S&P 500 closed up about 01% [6] - Nasdaq was down about 04% due to weakness in big cap tech names [7] - Dow Jones Industrial Average added 04% [7] - Russell 2000 outperformed, with small caps gaining tailwind [7] Earnings and Performance Highlights - Homebuilders outperformed, with the S&P composite 1500 homebuilding index up about 10% [2] - D R Horton's stock was up about 16% after third-quarter earnings beat expectations [18] - PulteGroup's stock was up 12% after reporting better-than-expected earnings [19] - Texas Instruments' second-quarter EPS was $141, beating the consensus estimate of $135, but the stock was down about 7% in after-hours trading [10][12] - Intuitive Surgical's second-quarter revenue came in at $244 billion, and adjusted EPS beat estimates at $22 billion, with shares initially moving higher but later declining [20][29] - Capital One's second-quarter adjusted EPS was $548, far exceeding the consensus estimate of $388, with net revenue at $1249 billion [22][23] - Enphase Energy's second-quarter adjusted EPS beat estimates by $006, and revenue came in better than forecast at $3632 million, with the stock up about 8% in after-hours trading [26] Company Specifics - Texas Instruments invested $39 billion in R&D and CIGNA and invested $49 billion in CapEx and returned $67 billion to owners over the past 12 months [14] - Intuitive Surgical's Da Vinci surgical system installed base grew to 10488 systems as of June 2025, a 14% increase compared to June 30th, 2020 [30] - Capital One's loans held for investment were approximately $4393 billion [23]