Small-Cap Stocks Surge to Record Highs Amid Market Optimism

Small-cap stocks, particularly those in the Russell 2000 Index, are poised for significant growth in 2025 due to recovering earnings, potential corporate tax cuts, and favorable valuations, according to Brian Manby of WisdomTree. The index has already surged 23% this year, with regional banks leading the rally. Manby highlights the potential benefits of U.S.-centered policies and deregulation under a Republican Congress, which could further boost small-cap financials. Despite recent gains, small caps remain undervalued compared to large caps, presenting a strong investment opportunity.