Group 1 - The speech by Federal Reserve Chairman Jerome Powell at the Jackson Hole Global Central Bank Conference may serve as a significant catalyst for the Russell 2000 index, which is primarily composed of small-cap stocks, with potential positive or negative impacts [1] - Historically, small-cap stocks have outperformed large-cap stocks during the Fed's rate-cutting cycles in economic downturns, while their performance in non-recessionary rate cuts has been mixed [1] - The potential for rate cuts to provide greater short-term excess returns for small-cap stocks is heightened due to their increased sensitivity to interest rates and refinancing risks over the past 1-2 years [1] Group 2 - The sustainability of a rebound in small-cap stocks following a potential rate cut signal from Powell will likely depend on the earnings backdrop, with second-quarter earnings exceeding expectations [2] - Despite positive second-quarter earnings, the outlook for the second half of the year is considered high, with ongoing downward revisions to small-cap earnings forecasts for Q3 and Q4 since early July [2] - Historical performance of the Russell 2000 factor groups during Fed rate-cutting cycles since 1989 indicates that value factors typically outperform growth factors, while momentum, quality, and cash return factors also show strong performance [2]