07-07-2025
Manic Market Mood Carries a Warning for Budding Small-Cap Rally
Signs that US equities are overheating are cropping up everywhere, foreshadowing trouble for the nascent rebound in some of the riskiest stocks.
As the S&P 500 Index roared to a record high in the past month, shares of small-cap companies — which typically carry a higher debt load and are less profitable than their larger counterparts — surged even more. They handily outpaced bigger peers as investors shed their defensive stance and rushed into more speculative nooks. But history shows that when enthusiasm tips over into euphoria, it's a bad omen for small caps.
