Small Caps Are Quietly Winning While Mega Caps Wobble
Thursday's selloff, led by Alphabet down 7% and Tesla down nearly 15%, was a great example of a story that has been unfolding throughout most of the year. While the largest stocks led the market lower last Thursday, many other stocks, especially small caps, were flat to higher on the day. That divergence has been a defining feature of 2026. This year, the most followed gauge of small caps, the Russell 2000, has gained roughly 17% year to date, on pace for its best annual performance since 2003. Over the same period, the S&P 500 has climbed by 8%, weighed down by the Magnificent Seven…
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