"Tech Stocks Drive Stock Market Rebound Despite S&P 500's Fifth Losing Day"
The small cap Russell 2000 Index is down nearly 3% year-to-date, underperforming compared to the S&P 500's gain, as market hopes for interest rate cuts this year have diminished. Small caps are more sensitive to credit and rates, with over 40% of their debt exposed to higher rates, while large caps have more long-rate fixed debt and cash that could benefit from higher rates. The shifting Fed narrative has put a damper on the small cap rally, and the main catalyst for small caps to move higher is more clarity on the Federal Reserve's interest rate path.