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iShares Russell 2000 ETF

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Basic Materials

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The Fund seeks to track the investment results of the Russell 2000 Index; the Underlying Index, which measures the performance of the small-capitalization sector of the U.S. equity market, as defined by FTSE Russell; the Index Provider or Russell.

Super Micro Computer, Inc.

Microstrategy Inc

Comfort Systems USA Inc.

Onto Innovation Inc

Carvana Co. Cl A

E-l Financial Corp., Ltd.

Fabrinet

Abercrombie & Fitch Co. Class A

Light & Wonder Inc Common Stock USD

Weatherford International Plc

Government

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AMAT

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ASML

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Prudent Investors Watching Risk To AI Stocks Like NVIDIA And AMD – Momo Monster Buying On Trump 2.0

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Small-cap stocks, including Comfort Systems USA, Fabrinet, and Carvana, have rallied for 5 days, with iShares Russell 2000 ETF up 9% in 5 sessions.

Russell 2000 Marks Fifth Day Of Gains: What&#39;s Driving Surge In Small-Cap Stocks?

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GRAL

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PACB

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iShares Trust Barclays 20+ Year Treasury Bond Fund

Wall Street continues to experience a series of memorable days, with the bulls riding the rally with increasing confidence, certain that the Federal Reserve will begin cutting interest rates in September.

Dow Rallies To All-Time Highs, Small Caps Outperform Tech, Gold Hits Records On Heightened September Rate Cut Bets: What&#39;s Driving Markets Tuesday?

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Small-cap stocks are surging, with the iShares Russell 2000 ETF up 9% in the last 5 days. This is due to expectations of Fed rate cuts, causing investors to rotate from tech to small caps.

Small Cap Stocks Are Having A Moment: Russell 2000 Notches Best 5-Day Rally In Over 4 Years

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Small Caps Breakout, 85% Probability Of A Rate Cut In September

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Small Cap Analysis

The concentration of the market rally has been a concern among analysts and now it appears that the rally could finally broaden.

Market Strategist Breaks Down Bull Case Scenario For Small-Caps, Predicts 40% Jump In Near Term: &#39;I Think It Is Just Starting&#39;

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Macro Economic Events

Rate-sensitive cyclical stocks may rally and outperform market as Fed lowers rates. Inflation data surprises since 1998, aligning for rotation.

Rate-Sensitive Cyclical Stocks Poised For Rally As Fed Prepares To Cut Rates: &#39;We&#39;re On The Path To Goldilocks,&#39; Says Bank Of America

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Select Sector SPDR-Consumer Discretionary

The U.S. stock market, represented by the index of the 500 largest companies by market capitalization, jumped to new all-time highs at the start of the week, as investors eagerly await Fed Chair Jerome Powell’s interview at 12:30 p.m. ET at the Economic Club of New York.

S&amp;P 500 Prints New Record Highs Ahead Of Powell Speech; Russell 2000 Rally Continues, Trump Stocks Spike: What&#39;s Driving Markets Monday?

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GOOGL

Rydex ETF Trust Rydex S&P Equal Weight ETF

XLRE

Inflation drops, speculations rise on interest rate cuts. Producer inflation data fails to alter expectations, tech sector underperforms.

Inflation Drop Fuels Rate Cut Speculation, Investors Shift To Sector Laggards, Russell 2000 Surges Over 3.6%: This Week In The Markets

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The Russell 2000 index of small caps recorded its best weekly performance since October 2023, surging over 6%, driven by lower-than-expected June inflation data and potential interest rate cuts.

Russell 2000 Index Notches Strongest Week Of Year, Hits 31-Month Highs: Outlook Is &#39;Clouded By Fed&#39;s Concerns Over Labor Market,&#39; Analyst Warns

NEOS ETF Trust NEOS Russell 2000 High Income ETF

ETRACS 2x Leveraged US Size Factor TR ETN

iShares Trust iShares Russell 2000 BuyWrite ETF

Tidal Trust II Defiance R2000 Enhanced Options Income ETF

WIIM

US Indexes are lower amid a rotation out of tech stocks.

FTAI Aviation Ltd. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FTAI#NYSE">FTAI</a>) and Applied Industrial Technologies, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AIT#NYSE">AIT</a>) were among <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/07/39797464/small-caps-are-having-a-moment-russell-2000-notches-best-5-day-rally-in-over-4-year">small-cap stocks</a> moving higher on Tuesday as the Russell 2000 Index had a fifth straight day of gains.
The iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>) gained 3.41% on Tuesday, ushering the index to a cumulative gain of over 9% across <a href="https://www.benzinga.com/topic/small-caps" target="_blank" rel="noreferrer noopener">the last five sessions.</a> This remarkable streak represents the Russell 2000's best five-day performance since June 2020.
FTAI Aviation, a provider of aircraft operations and engine maintenance, rose 5.63% to close at $107.42 on Tuesday, while Applied Industrial gained 4.63% to $210.59.
Also Read: <a href="https://www.benzinga.com/news/small-cap/23/12/36316131/russell-2000-rallies-to-16-month-highs-best-performing-small-cap-stocks-popping-over-80-in-decembe">Russell 2000 Rallies To 16-Month Highs: Best Performing Small-Cap Stocks Popping Over 80% In December</a>
FTAI Aviation accounts for 0.39% of the iShares Russell 2000 ETF, while Applied Industrial makes up 0.29% share, <a href="https://www.ishares.com/us/products/239710/ishares-russell-2000-etf">according </a>to iShares by BlackRock.
Individual stocks in the ETF that countered Tuesday&#8217;s small-cap advancement include Lantheus Holdings, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/LNTH#NASDAQ">LNTH</a>), which fell 3.97% to $118.30.
The rapid rise of small caps is attributed to the growing conviction that the Federal Reserve will lower interest rates at its September meeting. The Russell 2000 rally kicked off last week, driven by June inflation data coming in below expectations, sparking traders' speculation about rate cuts.
According to the CME Group's FedWatch Tool, fed futures now indicate a full 100% probability of an interest rate cut in nearly two months, marking the first reduction in borrowing costs since 2020. On Monday, Fed Chair&nbsp;Jerome Powell&nbsp;struck a dovish tone, acknowledging that recent inflation reports bolster confidence in returning to the 2% target, effectively hinting&nbsp;<a href="https://www.benzinga.com/economics/macro-economic-events/24/07/39779256/powell-praises-latest-inflation-progress-hints-at-imminent-rate-cuts-warns-hes-ve" target="_blank" rel="noreferrer noopener">at forthcoming rate cuts.</a>
Read Now:
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<li><a href="https://www.benzinga.com/markets/equities/24/03/37956811/russell-2000-vs-s-p-500-turning-tide-for-small-caps-risk-reward-trade-off-is-very-skewed">Russell 2000 Vs. S&amp;P 500: Turning Tide For Small Caps? &#8216;Risk-Reward Trade-Off Is Very Skewed&#8217;</a></li>
</ul>
Don&#8217;t miss the opportunity to dominate in a volatile market at the&nbsp;<a href="https://www.benzinga.com/events/small-cap/global-small-cap-conference-2024/" target="_blank" rel="noreferrer noopener">Benzinga SmallCAP Conference</a>&nbsp;on Oct. 9-10 at the Chicago Marriott Downtown Magnificent Mile. Get exclusive access to CEO presentations, 1:1 meetings with investors, and valuable insights from top financial experts. Whether you&#8217;re a trader, entrepreneur, or investor, this event offers unparalleled opportunities to grow your portfolio and network with industry leaders. Secure your spot and get your tickets today!
Image created using artificial intelligence via Midjourney.

Russell 2000 Marks Fifth Day Of Gains: What's Driving Surge In Small-Cap Stocks?

Wall Street continues to experience a series of memorable days, with the bulls riding the rally with increasing confidence, certain that the Federal Reserve will begin cutting <a href="https://www.benzinga.com/topic/interest-rates">interest rates in September.</a>
Fed futures currently indicate a 100% probability that policymakers will cut interest rates in two months, according to the CME Group&#8216;s FedWatch tool.
This time, blue-chip stocks and gold are stealing the spotlight by breaking their all-time highs, while small caps, as tracked by the iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>), have posted their fifth consecutive day in the green, marking their best five-day rally <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/07/39797464/small-caps-are-having-a-moment-russell-2000-notches-best-5-day-rally-in-over-4-year">in over four years.</a>
The Dow Jones Industrial Average surged to 40,800 points at 12:30 p.m. ET, up 1.5%, marking its best session since late May. Sector-wise, industrials rose 2.1%, eyeing the strongest one-day gain since October.
The S&amp;P 500 increased marginally by 0.3%, while tech stocks in the Nasdaq 100 slipped by 0.4%, as the rotation from large-cap tech to small-cap and cyclical laggards continues.
Gold, as tracked by the SPDR Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>), rose 1.6% to $2,460 per ounce, as Treasury yields sharply fell following Powell&#8217;s dovish remarks on Monday and a stagnation in <a href="https://www.benzinga.com/markets/bonds/24/07/39792320/june-retail-sales-stagnate-traders-fully-price-in-september-interest-rate-cut">retail sales growth in June.</a> The iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) rallied 1.1%. 
Oil prices dropped to $80 a barrel, down 1%, heading for the lowest close in nearly a month.
Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) fell by 0.5%, on track to snap a four-day losing streak.
<h1 class="wp-block-heading">Chart of The Day: Blue-Chip Stocks Achieve All-Time Highs</h1>
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="490" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/16122752/image-23-1024x490.png" alt="" class="wp-image-439050" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/16122752/image-23-1024x490.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/16122752/image-23-300x143.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/16122752/image-23-768x367.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/16122752/image-23-1536x734.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/16122752/image-23.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
Image: <a href="http://www.benzinga.com/pro/register/?utm_source=BZprocontent071624&amp;t=be2bearmibe3na1">Benzinga Pro</a>
<h1 class="wp-block-heading">Tuesday&#8217;s Performance In Major U.S. Indices, ETFs</h1>
<figure class="wp-block-table is-style-stripes"> 
<table>
<tbody>
<tr>
<td>Major Indices</td>
<td>Price</td>
<td>1-day % change</td>
</tr>
<tr>
<td>Russell 2000</td>
<td>2,240.18</td>
<td>2.3%</td>
</tr>
<tr>
<td>Dow Jones</td>
<td>40,816.48</td>
<td>1.5%</td>
</tr>
<tr>
<td>S&amp;P 500</td>
<td>5,646.17</td>
<td>0.3%</td>
</tr>
<tr>
<td>Nasdaq 100</td>
<td>20,296.39</td>
<td>-0.4%</td>
</tr>
</tbody>
</table>
<figcaption class="wp-element-caption">Updated at 12:30 p.m. ET</figcaption></figure>
According to <a href="http://www.benzinga.com/pro/register/?utm_source=BZprocontent071624&amp;t=be2bearmibe3na1">Benzinga Pro </a>data:
<ul>
<li>The&nbsp;SPDR S&amp;P 500 ETF Trust&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>)&nbsp;was 0.2% higher to $562.48.</li>
<li>The&nbsp;SPDR Dow Jones Industrial Average&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIA#NYSE">DIA</a>)&nbsp;rose by 1.4% to $408.06.</li>
<li>The tech-heavy&nbsp;Invesco QQQ Trust&nbsp;(ARCA:&nbsp;<a href="https://www.benzinga.com/quote/qqq" target="_blank" rel="noreferrer noopener"></a><a href="https://www.benzinga.com/quote/qqq" target="_blank" rel="noreferrer noopener"></a>QQQ) eased 0.5% to $493.58.</li>
<li>Sector-wise, the&nbsp;Industrials&nbsp;Select Sector SPDR Fund&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLI#NYSE">XLI</a>)&nbsp;outperformed, up by 2.2%, while the&nbsp;Technology Select Sector SPDR Fund&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLK#NYSE">XLK</a>) lagged, down 0.9%.</li>
</ul>
<h1 class="wp-block-heading">Tuesday&#8217;s Stock Movers</h1>
<ul>
<li>Bank of America Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BAC#NYSE">BAC</a>) soared over 5%, marking new all-time highs and the strongest day in 2024 amid stronger than <a href="https://www.benzinga.com/news/earnings/24/07/39790011/bank-of-americas-q2-earnings-revenue-and-eps-beat-1-5b-credit-loss-provision-sees-q4-nii-growth">expected results in the second quarter. </a></li>
<li>Other stocks reacting to company earnings were UnitedHealth Group Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UNH#NYSE">UNH</a>), up 5.3%; Morgan Stanley (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MS#NYSE">MS</a>), up 2.6%; Charles Schwab Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SCHW#NYSE">SCHW</a>), down over 8%; Progressive Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PGR#NYSE">PGR</a>), down 3.4%; PNC Financial Services Group (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PNC#NYSE">PNC</a>), up 4.4% and State Street Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/STT#NYSE">STT</a>), up 5.9%.</li>
<li>Boeing Company (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BA#NYSE">BA</a>) rose over 4% as Bernstein increased the company&#8217;s price target from $215 to $222 amid a restart of China deliveries.</li>
<li>Grail Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GRAL#NYSE">GRAL</a>) surged over 18% following the company&#8217;s announcement that it successfully enrolled more than 35,000 participants for its potential multi-cancer early detection test.</li>
<li>Match Group, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MTCH#NASDAQ">MTCH</a>) shares are trading higher on Tuesday after activist investment fund Starboard Value sent a letter to the company outlining initiatives to improve growth, <a href="https://www.benzinga.com/markets/equities/24/07/39785537/tinder-parent-match-group-soars-nearly-9-in-after-hours-trading-as-activist-hedge-fund-starboard">profitability, and capital allocation.</a></li>
<li>Shares of Trump Media &amp; Technology Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/DJT#NASDAQ">DJT</a>) dropped over 8% on Tuesday, following a surge of more than 30% the previous day.</li>
<li>Pacific Biosciences of California, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PACB#NASDAQ">PACB</a>) gained 28%, topping the performance within Russell 2000 constituents. </li>
</ul>
Read Now:
<ul>
<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/07/39780995/rate-sensitive-cyclical-stocks-poised-for-rally-as-fed-prepares-to-cut-rates-were-o">Rate-Sensitive Cyclical Stocks Poised For Rally As Fed Prepares To Cut Rates: &#8216;We&#8217;re On The Path To Goldilocks,&#8217; Says Bank Of America</a></li>
</ul>
Photo: Shutterstock

Dow Rallies To All-Time Highs, Small Caps Outperform Tech, Gold Hits Records On Heightened September Rate Cut Bets: What's Driving Markets Tuesday?

Small-cap stocks are on a tear, eyeing their fifth consecutive day of gains on Tuesday. The iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>) surged 1.9%, propelling the index to a cumulative gain of over 9% across <a href="https://www.benzinga.com/topic/small-caps">the last five sessions.</a> This remarkable streak represents the Russell 2000&#8217;s best five-day performance since June 2020. 
The turbocharged rise of small caps is attributed to the certainty at this point that the Federal Reserve will lower interest rates at its September meeting. In fact, the Russell 2000 rally kicked off last week, driven by June inflation data coming in below expectations, sparking traders&#8217; speculation about rate cuts.
According to the CME Group&#8217;s FedWatch Tool, fed futures now indicate a full 100% probability of an interest rate cut in nearly two months, marking the first reduction in borrowing costs since 2020. On Monday, Fed Chair Jerome Powell struck a dovish tone, acknowledging that recent inflation reports bolster confidence in returning to the 2% target, effectively hinting <a href="https://www.benzinga.com/economics/macro-economic-events/24/07/39779256/powell-praises-latest-inflation-progress-hints-at-imminent-rate-cuts-warns-hes-ve">at forthcoming rate cuts.</a>
Read also: 
<ul>
<li><a href="https://www.benzinga.com/trading-ideas/small-cap-analysis/24/06/39381483/worried-about-market-volatility-benzingas-smallcap-event-has-answers">Worried About Market Volatility? Benzinga&#8217;s SmallCAP Event Has Answers</a></li>
</ul>
<h3 class="wp-block-heading">Chart: Russell 2000 Notches Best 5-Day Upswing In Four Years</h3>
<figure class="wp-block-image size-large"><a href="http://www.benzinga.com/pro/register/?utm_source=BZprocontent071624&amp;t=be2bearmibe3na1"><img loading="lazy" decoding="async" width="1024" height="453" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/16101012/image-20-1024x453.png" alt="" class="wp-image-438683" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/16101012/image-20-1024x453.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/16101012/image-20-300x133.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/16101012/image-20-768x340.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/16101012/image-20-1536x679.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/16101012/image-20.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></a></figure>
Image: <a href="http://www.benzinga.com/pro/register/?utm_source=BZprocontent071624&amp;t=be2bearmibe3na1">Benzinga Pro</a>
<h2 class="wp-block-heading">Investors Rotate From Tech To Small Caps</h2>
Small caps&#8217; heightened sensitivity to interest rate expectations stems from their greater reliance on bank financing, unlike large-cap companies that frequently raise funds through stock and bond issuance in capital markets.
This is leading investors to shift their focus from early beneficiaries of rate cuts – mainly large-cap tech – to those expected to gain at a later stage (small caps and cyclical stocks).
Over the past five sessions, the Russell 2000 Index has outperformed the tech-heavy Invesco QQQ Trust (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>) – which tracks the Nasdaq 100 – by 10.4 percentage points, marking the widest five-day relative gain of small caps over tech since November 2016.
&#8220;There's certainly a bullish interpretation to the rotation, as any profit-taking in ‘overvalued' tech gets funneled into more neglected areas of the U.S. stock market. This buying, in turn, should lift all boats, just as it has helped the old-school Dow to smash above 40,000 to trade at new record highs,&#8221; said David Morrison, senior market analyst at Trade Nation.
<figure class="wp-block-image size-large"><a href="http://www.benzinga.com/pro/register/?utm_source=BZprocontent071624&amp;t=be2bearmibe3na1"><img loading="lazy" decoding="async" width="1024" height="506" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/16101522/image-21-1024x506.png" alt="" class="wp-image-438690" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/16101522/image-21-1024x506.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/16101522/image-21-300x148.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/16101522/image-21-768x380.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/16101522/image-21-1536x759.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/16101522/image-21.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></a></figure>
<h2 class="wp-block-heading">Preference For Small-Cap Value</h2>
&#8220;We still have questions on whether this rally is sustainable,&#8221; said Ayesha Tariq, macroeconomist and founder of Macrovisor.
Tariq highlighted that the performance of regional banks, which constitute a significant portion of the Russell 2000, remains uncertain as they have yet to report their earnings. While investment banks have shown strong results driven by trading activities, their net interest margins (NIMs) and wealth management divisions are still facing challenges. For instance, Bank of America has reported a 3% decrease in net interest income (NII), and Wells Fargo has seen a 9% decline.
Additionally, the persistence of relatively high yields indicates that regional banks may continue to face unrealized losses on their balance sheets, according to the expert.
Despite the recent rally, Tariq indicates that the Russell 2000 is still grappling with an earnings recession. However, she suggested that from an investment perspective, small-cap value stocks might be more appealing.
She referred to a chart shared by Bank of America that shows the valuation gap between large-cap growth – as tracked by the iShares S&amp;P 500 Growth ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IVW#NYSE">IVW</a>) and small-cap value stocks – as monitored through the iShares Russell 2000 Value ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWN#NYSE">IWN</a>) – was at its widest since 2000, prior to the recent small-cap rally, indicating potential for further a &#8220;catch-up&#8221; and rotation trade.
<figure class="wp-block-image size-large"><a href="http://www.benzinga.com/pro/register/?utm_source=BZprocontent071624&amp;t=be2bearmibe3na1"><img loading="lazy" decoding="async" width="1024" height="506" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/16102317/image-22-1024x506.png" alt="" class="wp-image-438703" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/16102317/image-22-1024x506.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/16102317/image-22-300x148.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/16102317/image-22-768x380.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/16102317/image-22-1536x759.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/16102317/image-22.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></a></figure>
Read Next:
<ul>
<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/07/39780995/rate-sensitive-cyclical-stocks-poised-for-rally-as-fed-prepares-to-cut-rates-were-o">Rate-Sensitive Cyclical Stocks Poised For Rally As Fed Prepares To Cut Rates: &#8216;We&#8217;re On The Path To Goldilocks,&#8217; Says Bank Of America</a></li>
</ul>
Don't miss the opportunity to dominate in a volatile market at the <a href="https://www.benzinga.com/events/small-cap/global-small-cap-conference-2024/">Benzinga SmallCAP Conference</a> on Oct. 9-10 at the Chicago Marriott Downtown Magnificent Mile. Get exclusive access to CEO presentations, 1:1 meetings with investors, and valuable insights from top financial experts. Whether you're a trader, entrepreneur, or investor, this event offers unparalleled opportunities to grow your portfolio and network with industry leaders. Secure your spot and get your tickets today!
Photo: Shutterstock

US indexes are higher as Bank Of America and UnitedHealth rise following their earnings reports, while better-than-expected June retail sales also lift sentiment. The Nasdaq fell amid a possible rotation out of tech.

Small-caps have been on tear ever since the second day of Federal Reserve Chair Jerome Powell&#8217;s<a href="https://www.benzinga.com/government/24/07/39714170/jerome-powell-tells-congress-the-fed-could-cut-rates-if-either-of-these-things-happen-inflation-has"> Congressional testimony</a> when he chose to adopt a dovish tone, and a market strategist said on Monday that the rally in the space is only getting started.
What Happened: The rally seen in the current leg-up will likely be larger than the upside seen in the October-December period, said Fundstrat&#8217;s Head of Research Tom Lee in an interview with CNBC. During the eight-week period late last year, the Russell 2,000 Index, a small caps-focused index, rose nearly 30%, he noted.
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<blockquote class="twitter-tweet" data-width="500" data-dnt="true">The Russell 2000 hit its highest level since January 2022 and ended the day nearly two percent higher, but can this run continue for the rest of the year? Tom Lee (<a href="https://twitter.com/fundstrat?ref_src=twsrc%5Etfw">@fundstrat</a>) breaks down his bull case for small caps. <a href="https://t.co/2kbPBzyk82">pic.twitter.com/2kbPBzyk82</a>
&mdash; CNBCOvertime (@CNBCOvertime) <a href="https://twitter.com/CNBCOvertime/status/1812947451256471704?ref_src=twsrc%5Etfw">July 15, 2024</a></blockquote>
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This time around, institutions are holding a larger short position in small caps and these stocks are even more oversold, Lee said. The median price-earnings multiple of small-caps is now 10 times the estimated earnings for 2025, or even lower, he added.
&#8220;So we think that this move could be something like 10 weeks and as much as 40%,&#8221; Lee said, adding that, &#8220;I think it is just starting.&#8221;
Delving into the reason for the reversal in sentiment toward small-cap stocks, Lee noted that the June consumer price inflation was so &#8220;astonishingly soft.&#8221; &#8220;I think it's giving the green light for small caps to rally finally because the Fed will you know ultimately cut hopefully by September,&#8221; he added.
See Also:<a href="https://www.benzinga.com/money/best-small-cap-stocks"> Best Small Cap Stocks Right Now</a>
Why It&#8217;s Important: The iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>), an exchange-traded fund that tracks the performance of the Russell 2,000 Index, has gained 8.8% so far this year compared to the roughly 19% gain for the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) for the same period.
Incidentally, before the start of the year, Deepwater Asset Management&#8217;s Gene Munster predicted that 2024 will likely see the IWM outperforming the SPY. &#8220;Sub-$20 billion <a href="https://www.benzinga.com/analyst-ratings/analyst-color/23/12/36399329/apple-to-release-ai-siri-no-tesla-robotaxi-reddit-acquisition-deep-fakes-mar-us-ele">tech companies are poised to outperform</a> large-cap companies,&#8221; he added.
This has sort of ring true over the past few sessions. Since July 5, the IWM has gained 8.1%, while the SPY has added a more modest 1.2%. The buoyancy seen in the small-cap space is due to the fact that most of these companies are reliant on debt for running operations. The anticipated Fed rate cut will likely reduce the cost of debt and also make it easy to tap further into the debt market.
The catch-up by small-caps is also important for the broader market rally, which has so far relied on some heavy-weighted mega-cap techs. The sustenance of the uptrend, analysts say, hinges on the broadening out of the rally.
IWM ended Monday&#8217;s session up 1.90% at $217.19, according to<a href="http://pro.benzinga.com"> Benzinga Pro</a> data.
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Stocks Photo by Jirapong Manustrong on Shutterstock

Market Strategist Breaks Down Bull Case Scenario For Small-Caps, Predicts 40% Jump In Near Term: 'I Think It Is Just Starting'

Rate-sensitive cyclical stocks could see a significant rally and outperform the broader market as the Federal Reserve prepares to lower interest rates following the latest benign inflation data, according to <a href="https://www.benzinga.com/money/cyclical-stocks">a report by Bank of America</a>.
&#8220;Last week, inflation ticked another box for the Fed,&#8221; said economist Stephen Juneau, noting that June&#8217;s inflation reading provided the most substantial downside surprise compared to analyst estimates since 1998.
<h3 class="wp-block-heading">Path To &#8216;Goldilocks&#8217; In 2024</h3>
Bank of America suggests we are &#8220;on the path to Goldilocks in 2024.&#8221; The bank describes a scenario with moderating but stable macroeconomic conditions and a cooling consumer price index (CPI).
In this kind macroeconomic environment, &#8220;the stars are aligning for the rotation into rate-sensitive cyclicals,&#8221; stated equity analyst Ohsung Kwon.
Kwon highlighted that easing rate pressure, Fed-supported growth, and broadening earnings as the &#8220;Other 493&#8221; companies emerge from an earnings recession will support this rotation.
<h3 class="wp-block-heading">Small Caps vs. Large Caps</h3>
Last week&#8217;s record CPI miss resulted in a massive outperformance of small caps compared to large caps.
The iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>) rallied by over 6%, notching its strongest week since October 2023. In contrast, the S&amp;P 500, as tracked by the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), did rally only by 0.9% for the week. 
This fragility beneath the surface contrasts sharply with the low volatility in the S&amp;P 500, a risk flagged by Bank of America. The bank recommends mitigating the risk of sharp rotations, whether the post-CPI moves extend or reverse, through outperformance option calls, such as Russell 2000 vs. Nasdaq 100 or equal- vs. market-weight S&amp;P 500.
Chart: Small Caps Showcased Strongest Weekly Performance In 2024 On Rate-Cut Speculations
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="488" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/15151644/Screenshot-2024-07-12-alle-20.34.21-1-1024x488.png" alt="" class="wp-image-436914" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/15151644/Screenshot-2024-07-12-alle-20.34.21-1-1024x488.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/15151644/Screenshot-2024-07-12-alle-20.34.21-1-300x143.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/15151644/Screenshot-2024-07-12-alle-20.34.21-1-768x366.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/15151644/Screenshot-2024-07-12-alle-20.34.21-1-1536x732.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/15151644/Screenshot-2024-07-12-alle-20.34.21-1.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
Image: <a href="http://www.benzinga.com/pro/register/?utm_source=BZprocontent071524&amp;t=be2bearmibe3na1">Benzinga Pro</a>
<h3 class="wp-block-heading">Importance of 2Q Earnings Season</h3>
The second-quarter earnings season is expected to be crucial for equities as the market increasingly focuses on earnings rather than multiples. 
Despite some concerns that disinflation could become a headwind to earnings by weakening pricing power, Bank of America anticipates a typical 2% EPS beat. 
&#8220;We believe the equity cycle is in a different phase than the macrocycle. While the economy is slowing, earnings are accelerating,&#8221; the report stated.
<h3 class="wp-block-heading">Best Macro Environment for Stocks</h3>
Historically, a backdrop of slowing GDP and accelerating EPS has been the best macro environment for stocks, resulting in a benign rate environment and strong fundamentals. 
Bank of America expects continued acceleration in earnings in the second half of the year as the &#8220;Other 493&#8221; companies (excluding the Magnificent 7) recover from their earnings recession.
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</ul>
Image: Pixabay

Rate-Sensitive Cyclical Stocks Poised For Rally As Fed Prepares To Cut Rates: 'We're On The Path To Goldilocks,' Says Bank Of America

The U.S. stock market, represented by the index of the 500 largest companies by market capitalization, jumped to new all-time highs at the start of the week, as investors eagerly await Fed Chair Jerome Powell&#8217;s interview at 12:30 p.m. ET at the Economic <a href="https://www.benzinga.com/topic/jerome-powell">Club of New York.</a>
After the assassination attempt during Donald Trump&#8217;s rally in Butler, Pennsylvania, last Saturday, market-prediction odds indicate a 72% chance of the tycoon winning the 2024 elections. This appears to maintain a high-risk appetite among investors, although there is still a noticeable preference for small caps over large caps, and cyclical sectors over defensive ones.
Following the best weekly performance since October 2023, small caps continue to rally on Monday, with the Russell 2000 Index, as tracked by the iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>), rising over 2%, on track to notch its fourth straight session of gains. The 8% rise over the last four sessions marks the Russell 2000&#8217;s best four-day rally since June 2020.
Energy and financials outperform other sectors on Wall Street, while utilities witness their worst daily performance since January 2024.
Gold shines among commodities, with yellow metal prices soaring to $2,437 per ounce, nearing the all-time high barrier.
Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) jumps to over $63,000, up 3.7%, marking its best day in about two months.
<h1 class="wp-block-heading">Monday&#8217;s Performance In Major U.S. Indices, ETFs</h1>
<figure class="wp-block-table is-style-stripes"> 
<table>
<tbody>
<tr>
<td>Major Indices</td>
<td>Price</td>
<td>1-day %chg</td>
</tr>
<tr>
<td>Russell 2000</td>
<td>2,192.31</td>
<td>2.0%</td>
</tr>
<tr>
<td>Nasdaq 100</td>
<td>20,530.34</td>
<td>1.0%</td>
</tr>
<tr>
<td>S&amp;P 500</td>
<td>5,656.91</td>
<td>0.7%</td>
</tr>
<tr>
<td>Dow Jones</td>
<td>40,261.34</td>
<td>0.7%</td>
</tr>
</tbody>
</table>
<figcaption class="wp-element-caption">Updated at 12: 33 PM ET</figcaption></figure>
<h1 class="wp-block-heading">According to&nbsp;<a href="http://www.benzinga.com/pro/register/?utm_source=BZprocontent071524&amp;t=be2bearmibe3na1">Benzinga Pro&nbsp;data</a>:</h1>
<ul>
<li>The&nbsp;SPDR S&amp;P 500 ETF Trust&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>)&nbsp;was 0.6% higher to $563.41.</li>
<li>The&nbsp;SPDR Dow Jones Industrial Average&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIA#NYSE">DIA</a>)&nbsp;rose by 0.6% to $402.83.</li>
<li>The tech-heavy&nbsp;Invesco QQQ Trust&nbsp;(ARCA:&nbsp;<a href="https://www.benzinga.com/quote/qqq" target="_blank" rel="noreferrer noopener"></a><a href="https://www.benzinga.com/quote/qqq" target="_blank" rel="noreferrer noopener"></a>QQQ) soared 0.8% to $498.93.</li>
<li>Sector-wise, the&nbsp;Energy&nbsp;Select Sector SPDR Fund&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>)&nbsp;outperformed, up by 1.7%, while the&nbsp;Utilities Select Sector SPDR Fund&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLU#NYSE">XLU</a>) lagged, down 2%.</li>
</ul>
<h1 class="wp-block-heading">Monday&#8217;s Stock Movers</h1>
<ul>
<li>Goldman Sachs Group Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GS#NYSE">GS</a>) rose over 1% to a new all-time peak as the bank reported stronger-than-expected earnings and revenue last quarter.</li>
<li>BlackRock Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BLK#NYSE">BLK</a>) rose 0.4% in reaction to its quarterly results. </li>
<li>Trump Media &amp; Technology Group Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DJT#NYSE">DJT</a>) rallied over 27% on Monday, driven by rising market-implied odds of Trump following the assassination attempt.</li>
<li>Bitcoin-linked stocks such as MicroStrategy Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSTR#NASDAQ">MSTR</a>), Coinbase Global Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/COIN#NASDAQ">COIN</a>), and Marathon Digital Holdings Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MARA#NASDAQ">MARA</a>) rallied 13%, 10.5% and 9%, respectively, as crypto assets surged.</li>
<li>Macys Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/M#NYSE">M</a>) plummeted by about 13%, marking the strongest one-day drop since August 2023, as the company ended buyout talks with Arkhouse Management.</li>
</ul>
Read Now: • <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/07/39757289/russell-2000-index-notches-strongest-week-of-year-hits-31-month-highs-outlook-is-cl">Russell 2000 Index Notches Strongest Week Of Year, Hits 31-Month Highs: Outlook Is &#8216;Clouded By Fed&#8217;s Concerns Over Labor Market,&#8217; Analyst Warns</a>
This photo was generated using artificial intelligence Dall-E.

S&P 500 Prints New Record Highs Ahead Of Powell Speech; Russell 2000 Rally Continues, Trump Stocks Spike: What's Driving Markets Monday?

US indexes are higher after Donald Trump survived a weekend assassination attempt. Investors assess the impact of the attempted assassination on the 2024 presidential election.

Consumer price index data this week provided encouraging signs that American inflation is moving ever closer to the Federal Reserve&#8217;s <a href="https://www.benzinga.com/government/24/06/39470021/janet-yellen-says-inflation-to-come-down-to-feds-2-target-by-2025-dismisses-possibility-of-us-recess">much-discussed 2% target</a>.
This fueled speculation <a href="https://www.benzinga.com/economics/macro-economic-events/24/07/39728268/inflation-slows-more-expected-to-3-in-june-heightens-expectations-for-rate-cuts-t">about interest rate cuts.</a>
The annual inflation rate dropped more than expected to 3% in June 2024, reaching its lowest level since March 2021. Remarkably, the monthly inflation rate showed a contraction of 0.1% for the first time since May 2020.
Investors and economists increased their convictions on the Fed's readiness to cut <a href="https://www.benzinga.com/general/politics/24/07/39731800/biden-cheers-inflation-progress-rate-cut-chorus-grows-louder-among-5-economists-this-is-just-wha">interest rates in September</a>, pushing market-implied odds of a cut to over 90%.
A <a href="https://www.benzinga.com/economics/macro-economic-events/24/07/39748331/june-producer-inflation-exceeds-forecasts-restrains-investor-euphoria-following-c">higher-than-expected producer inflation</a> data report Friday did little to alter these expectations significantly, as the <a href="https://www.benzinga.com/markets/equities/24/07/39750466/us-consumer-morale-dips-more-than-expected-in-july-sentiment-remains-stubbornly-subdued">latest consumer sentiment report</a> from the University of Michigan confirmed subdued morale and a decline in inflation expectations.
In the markets, sectors previously impacted by high interest rates — and have not yet priced in potential reductions in borrowing costs — outperformed the tech sector, which had already largely <a href="https://www.benzinga.com/markets/asia/24/07/39733667/inflation-data-sparks-rush-for-gold-real-estate-treasuries-yen-traders-see-september-rate-cut-as-don">anticipated such rate cuts.</a>
The equal-weight S&amp;P 500, as tracked by the Invesco S&amp;P 500 Equal Weight ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RSP#NYSE">RSP</a>) outpaced the cap-weighted S&amp;P 500, monitored through the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), while value stocks outperformed their growth counterparts. 
Both the real estate sector — as tracked by the Real Estate Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLRE#NYSE">XLRE</a>) – and the Russell 2000 small-cap index — as replicated by the iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>) – achieved their strongest week of the year.
Chart Of The Week: Russell 2000 Enjoyed Strongest Week Since October 2023
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="488" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/12143443/image-17-1024x488.png" alt="" class="wp-image-434055" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/12143443/image-17-1024x488.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/12143443/image-17-300x143.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/12143443/image-17-768x366.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/12143443/image-17-1536x732.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/12143443/image-17.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
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The Russell 2000 index of small caps, tracked by the iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>), recorded its best weekly performance since October 2023, surging over 6% and reaching its highest <a href="https://www.benzinga.com/topic/small-caps">level since January 2022.</a>
The rally was largely driven by Thursday&#8217;s session, where the Russell 2000 posted a remarkable 3.6% daily gain. This spike followed lower-than-expected June inflation data, which fueled speculation of potential interest rate cuts.
However, Quincy Krosby, chief global strategist for LPL Financial, advises caution, suggesting that Russell 2000&#8217;s rate cut message may be &#8220;clouded by Fed&#8217;s concerns over labor market.&#8221;
Krosby thinks a weaker labor market would still hurt the economically sensitive Russell 2000 index, and rate cuts may not necessarily shield it from a broader economic slowdown.
<h1 class="wp-block-heading">Chart of The Week: Small Caps Achieved Best-Performing Week In Over 8 Months</h1>
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="488" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/12145314/Screenshot-2024-07-12-alle-20.34.21-1024x488.png" alt="" class="wp-image-434094" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/12145314/Screenshot-2024-07-12-alle-20.34.21-1024x488.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/12145314/Screenshot-2024-07-12-alle-20.34.21-300x143.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/12145314/Screenshot-2024-07-12-alle-20.34.21-768x366.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/12145314/Screenshot-2024-07-12-alle-20.34.21-1536x732.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/12145314/Screenshot-2024-07-12-alle-20.34.21.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
Image: <a href="URL:&nbsp;http://www.benzinga.com/pro/register/?utm_source=BZprocontent071224&amp;t=be2bearmibe3na1">Benzinga Pro</a>
The Russell 2000&#8217;s impressive performance highlights a significant shift in market focus, with interest rate-sensitive small and mid-cap stocks benefiting as investors move away from mega-tech names and direct inflows into the broader market, Krosby highlighted.
The analyst indicated the Russell 2000 serves as a critical indicator for potential interest rate easing and broader economic conditions. Typically, the small- and mid-cap universe will sell off at any hint of a significant economic slowdown, despite their attractive valuations.
&#8220;Historically, the Russell 2000 lags the market for three months following the first rate cut as the Fed normally cuts rates due to concerns about the economy and specifically the labor market. Fed Chair Powell has made it clear, as he continues to invoke the Fed's maximum employment mandate, that the Fed would cut rates at a faster pace to help support the economy,&#8221; she said. 
If labor market conditions deteriorate, the Fed might initiate an easing cycle sooner than the scheduled Sept. 18 meeting, Krosby stated. The market prefers a rate cut driven by inflation easing within a robust economic backdrop.
<h1 class="wp-block-heading">This Week&#8217;s Top Performers In The Russell 2000</h1>
<ol>
<li>Morphic Holding, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MORF#NASDAQ">MORF</a>): 75.16% (Health Care)</li>
<li>Lantheus Holdings, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/LNTH#NASDAQ">LNTH</a>): 55.47% (Health Care)</li>
<li>IGM Biosciences, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/IGMS#NASDAQ">IGMS</a>): 54.22% (Health Care)</li>
<li>SoundHound AI, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SOUN#NASDAQ">SOUN</a>): 52.63% (Information Technology)</li>
<li>Methode Electronics, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MEI#NASDAQ">MEI</a>): 47.96% (Information Technology)</li>
<li>Solaris Oilfield Infrastructure, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SOI#NYSE">SOI</a>): 46.87% (Energy)</li>
<li>Pulse Biosciences, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PLSE#NASDAQ">PLSE</a>): 45.98% (Health Care)</li>
<li>Ouster, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OUST#NYSE">OUST</a>): 44.21% (Information Technology)</li>
<li>EVgo, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/EVGO#NASDAQ">EVGO</a>): 42.65% (Consumer Discretionary)</li>
<li>Sunrun Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/RUN#NASDAQ">RUN</a>): 42.51% (Industrials)</li>
</ol>

Read Now:
<ul>
<li><a href="https://www.benzinga.com/markets/equities/24/07/39750466/us-consumer-morale-dips-more-than-expected-in-july-sentiment-remains-stubbornly-subdued">US Consumer Morale Dips More Than Expected In July: Sentiment &#8216;Remains Stubbornly Subdued&#8217;</a></li>
</ul>
Photo: Shutterstock

Russell 2000 Index Notches Strongest Week Of Year, Hits 31-Month Highs: Outlook Is 'Clouded By Fed's Concerns Over Labor Market,' Analyst Warns

US indexes are higher despite hotter-than-expected PPI figures. Investors also assess mixed bank earnings.

It&#8217;s another memorable day for the stock market, as the blue-chip <a href="https://www.benzinga.com/topic/dow-jones-industrial-average">Dow Jones Industrial Average</a> Index reaches new record highs, surpassing the 40,000-mark milestone and breaking the previous peak set in May.
Small caps continue their rally driven by strong bets on interest rate cuts, sustaining momentum <a href="https://www.benzinga.com/news/large-cap/24/07/39736302/tech-stocks-tumble-as-small-caps-reits-gold-miners-rally-soft-june-inflation-ignites-rate-cut-expe">after Thursday&#8217;s extraordinary surge.</a> The Russell 2000 Index, as tracked by the iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>), has had its best week of the year, gaining over 6%.
Each of the eleven S&amp;P 500 sectors showed a gain Friday, with the index of the 500 largest U.S. corporations rising 0.9%. For the S&amp;P 500, this marks the tenth positive week out of the last twelve.
The Nasdaq 100 also showed a solid rebound, rising by 1% after a 2.2% selloff the previous day. 
On the macro front, <a href="https://www.benzinga.com/economics/macro-economic-events/24/07/39748331/june-producer-inflation-exceeds-forecasts-restrains-investor-euphoria-following-c">producer inflation rose more than expected in June.</a> However, this did not affect expectations for rate cuts, with traders firmly anticipating a cut in September, assigning it a near-certain probability.
The consumer sentiment index measured by the University of Michigan continues to show signs of weakness in July, though it also indicates a decrease<a href="https://www.benzinga.com/markets/equities/24/07/39750466/us-consumer-morale-dips-more-than-expected-in-july-sentiment-remains-stubbornly-subdued"> in future inflation expectations.</a>
Major banks such as JPMorgan Chase &amp; Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/JPM#NYSE">JPM</a>), Citigroup Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/C#NYSE">C</a>), and Wells Fargo &amp; Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/WFC#NYSE">WFC</a>) reported better-than-expected earnings, yet market reactions were negative, particularly for Wells Fargo amid a weakening outlook <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/07/39751519/jpmorgan-citigroup-wells-fargo-boast-better-than-expected-q2-results">on net interest income. </a>
Treasury yields were steady, with the 10-year yield hovering at 4.20%, on track for the lowest close since late March. The dollar weakened further, poised for its second consecutive week of declines.
In commodities markets, gold inched up 0.1%, battling for its fourth straight session of gains. Natural gas spiked 3%, while oil prices softened by 0.2%.
In the cryptocurrency market, Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) rose by 1.3%, trading above $58,000.
<h3 class="wp-block-heading">Friday&#8217;s Performance In Major US Indices, ETFs</h3>
<figure class="wp-block-table is-style-stripes"> 
<table>
<tbody>
<tr>
<td>Major Indices</td>
<td>Price</td>
<td>1-day %chg</td>
</tr>
<tr>
<td>Russell 2000</td>
<td>2,150.28</td>
<td>1.2%</td>
</tr>
<tr>
<td>Nasdaq 100</td>
<td>20,415.64</td>
<td>1.0%</td>
</tr>
<tr>
<td>S&amp;P 500</td>
<td>5,633.65</td>
<td>0.9%</td>
</tr>
<tr>
<td>Dow Jones</td>
<td>40,101.75</td>
<td>0.9%</td>
</tr>
</tbody>
</table>
<figcaption class="wp-element-caption">Updated at 1:00 PM ET</figcaption></figure>
According to&nbsp;<a href="http://www.benzinga.com/pro/register/?utm_source=BZprocontent071224&amp;t=be2bearmibe3na1">Benzinga Pro&nbsp;data</a>:
<ul>
<li>The&nbsp;SPDR S&amp;P 500 ETF Trust&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>)&nbsp;was 0.9% higher to $561.58.</li>
<li>The SPDR Dow Jones Industrial Average (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIA#NYSE">DIA</a>) rose by 0.9% to $397.59.</li>
<li>The tech-heavy&nbsp;Invesco QQQ Trust&nbsp;(ARCA:&nbsp;<a href="https://www.benzinga.com/quote/qqq" target="_blank" rel="noreferrer noopener"></a><a href="https://www.benzinga.com/quote/qqq" target="_blank" rel="noreferrer noopener"></a>QQQ) rebounded 1% to $496.94.</li>
<li>Sector-wise, the&nbsp;Consumer Discretionary&nbsp;Select Sector SPDR Fund&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLY#NYSE">XLY</a>)&nbsp;outperformed, up by 1.7%, while the&nbsp;Communication Services Select Sector SPDR Fund&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLC#NYSE">XLC</a>) lagged, up 0.1%.</li>
</ul>
<h3 class="wp-block-heading">Friday&#8217;s Stock Movers</h3>
<ul>
<li>EV-related stocks rallied substantially amid strong expectations for Q2 deliveries. Shares of Lucid Group Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/LCID#NASDAQ">LCID</a>), Rivian Automotive Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/RIVN#NASDAQ">RIVN</a>) and Tesla Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>) rocketed 21%, 11% and 4% respectively. </li>
<li>Bank of New York York Mellon Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BK#NYSE">BK</a>) rose over 5%, in reaction to its earnings, eyeing the strongest session in two years. </li>
<li>QuantumScape Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QS#NASDAQ">QS</a>) rallied 18% after the company announced Thursday it entered into an agreement with&nbsp;Volkswagen&#8217;s PowerCo&nbsp;to&nbsp;<a href="https://www.benzinga.com/news/24/07/39750475/bank-of-new-york-mellon-posts-upbeat-earnings-joins-archer-aviation-rivian-automotive-and-other-big" target="_blank" rel="noreferrer noopener">industrialize solid-state batteries</a></li>
<li>Carvana Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CVNA#NYSE">CVNA</a>) rose over 8% to $140 after BTIG initiated coverage at Buy with $155 price target. </li>
</ul>
Read now: 
<ul>
<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/07/39740280/yardeni-raises-s-p-500-year-end-target-to-5-800-hints-at-faster-than-expected-disco">Yardeni Raises S&amp;P 500 Year-End Target To 5,800, Hints At Faster-Than-Expected Discounting Of &#8216;Roaring 2020s Scenario</a>&#8216;</li>
</ul>
Image created using artificial intelligence via Midjourney.

CVNA

LCID

RIVN

Dow Reaches Record Highs Above 40,000, Small Caps Ride The Rate-Cut Wave, EV Stocks Rally: What's Driving Markets Friday?

The recent drop in U.S. inflation has sparked discussions about potential interest rate cuts by the U.S.&nbsp;Federal Reserve Bank. As inflation cools, investors are reconsidering their portfolios, with cannabis stocks emerging as a potential opportunity.
<h3>Cooling Inflation Trends</h3>
Inflation in the U.S. has decreased for three consecutive months, with a 0.1% decline from May to June. This marks the first monthly drop since the pandemic&#39;s peak in May 2020. Year-over-year, prices rose by 3% in June, <a href="https://apnews.com/article/inflation-prices-rates-economy-federal-reserve-biden-8d15ca77433a1ae072a1e63dfc089f24">down from </a>3.3% in May.
<h3>Federal Reserve&#39;s Response</h3>
With inflation approaching the Fed&#39;s 2% target, there is growing anticipation that the central bank may start cutting interest rates as early as September. Lower interest rates generally encourage investment in growth sectors, such as <a href="https://www.benzinga.com/cannabis">cannabis</a>.
<h3>Investor Shifts</h3>
Traditionally, high inflation drives investors towards big tech stocks due to their strong pricing power and cash reserves. However, as inflation cools and rate cuts loom, investors may shift towards smaller, emerging sectors like cannabis, which offer higher growth potential.
<h3>Cannabis Sector Potential</h3>
The cannabis industry, particularly U.S. Multi-State Operators (MSOs), stands to benefit from increased investor interest. Lower interest rates reduce borrowing costs, which can help cannabis companies expand operations and improve profitability. Moreover, as the market becomes more stable, investors might seek opportunities in sectors previously considered higher-risk, such as cannabis.
Read Also:<a href="https://www.benzinga.com/markets/cannabis/24/06/39421104/the-banking-crisis-for-cannabis-has-been-over-for-several-years-experts-discuss-whats-next">&nbsp;&#39;The Banking Crisis For Cannabis Has Been Over&#39; For Several Years, Experts Discuss What&#39;s Next</a>
<h3>Market Reactions</h3>
Recent market movements reflect this trend. While big tech stocks saw a sell-off despite positive inflation data, <a href="https://www.benzinga.com/markets/equities/24/07/39743338/s-p-500-to-plunge-more-than-20-near-term-top-economist-breaks-down-broader-market-vs-small-cap-d">smaller caps</a>, including those in the cannabis sector, experienced significant gains. The SPDR S&amp;P 500 ETF Trust (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/spy#NYSE">SPY</a>) ended down 0.86% at $556.48, while the iShares Russell 2000 ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/iwm#NYSE">IWM</a>) climbed 3.59%.
Notable sell-offs included Tesla (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/tsla#NASDAQ">TSLA</a>) and NVIDIA (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/nvda#NASDAQ">NVDA</a>). The Producer Price Index report<a href="https://www.benzinga.com/economics/macro-economic-events/24/07/39748331/june-producer-inflation-exceeds-forecasts-restrains-investor-euphoria-following-c"> showed </a>a higher-than-expected increase, which might temper some expectations of immediate rate cuts but does not derail the overall trend toward lower inflation. This divergence indicates growing investor confidence in sectors that could benefit from lower rates and economic stability.
Investors are shifting from big tech stocks to smaller companies, partly due to a drop in U.S. inflation in June, which supports a disinflation outlook. The current ratio, a measure of a company&#39;s <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/06/39470114/debt-deadline-looms-how-cannabis-companies-financial-health-could-impact-your-portf">ability to pay short-term debts</a>, is often used to assess financial health but has limitations, especially in the cannabis industry where inventory and debt renewal practices can skew the numbers. Understanding these nuances is crucial for accurate financial analysis.
As the Federal Reserve prepares for potential rate cuts in response to cooling inflation, investors are likely to explore new growth opportunities. The cannabis sector, with its promising expansion and profitability prospects, could attract substantial interest, positioning it as a key player in the post-inflation investment landscape.
Read Next:&nbsp;<a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/07/39740610/does-size-matter-these-two-small-cap-cannabis-stocks-are-masters-of-cash-flow-and-c">Does Size Matter? These Two Small-Cap Cannabis Stocks Are Masters Of Cash Flow And Credit Management</a>
These issues will be a hot topic&nbsp;at the upcoming Benzinga Cannabis Capital Conference in Chicago this Oct. 8-9. Join us to get more insight into what the wave of weed legalization means for the future of investing in the&nbsp;industry. Hear directly from top executives, investors, advocates, and policymakers.&nbsp;<a href="https://www.eventbrite.com/e/benzinga-capital-conference-cannabis-fall-2024-tickets-858948065787?aff=oddtdtcreator" rel="noreferrer noopener" target="_blank">Get your tickets now</a>&nbsp;before prices go up by following&nbsp;<a href="https://www.eventbrite.com/e/benzinga-capital-conference-cannabis-fall-2024-tickets-858948065787?aff=oddtdtcreator" rel="noreferrer noopener" target="_blank">this link</a>.
Photo: AI-Generated Image.&nbsp;

Cannabis

Regulations

Emerging Markets

Financing

U.S. Inflation Drop Paves Way For Federal Reserve Rate Cuts: Will Cannabis Stocks Benefit?

Preliminary estimates from the University of Michigan revealed that U.S. consumer confidence has declined more rapidly than anticipated in July, hitting its lowest level since November 2023.
The survey also indicated that inflation expectations have slightly eased, implying that the drop in consumer sentiment is beginning to impact demand and exert <a href="https://www.benzinga.com/topic/inflation">downward pressure on prices.</a>
<h3 class="wp-block-heading">University Of Michigan July Consumer Sentiment Report: Key Highlights</h3>
<ul>
<li>The University of Michigan consumer sentiment index fell from 68.2 in June to 66, missing economist estimates – as tracked by TradingEconomics – of 68. </li>
<li>The sub-index for consumer expectations eased from 69.6 to 67.2, below the expected 69.8.</li>
<li>The sub-index for current conditions fell from 65.9 to 64.1, below the predicted 66.3.</li>
<li>The year-ahead inflation expectations decreased from 3% to 2.9%, as expected. Long-term inflation expectations edged lower from 3% to 2.9%, below the expected 3%. </li>
</ul>
<h3 class="wp-block-heading">Economist Takeaways</h3>
"Although sentiment is more than 30% above the trough from June 2022, it remains stubbornly subdued. Nearly half of consumers still object to the impact of high prices, even as they expect inflation to continue moderating in the years ahead," said the University of Michigan's Surveys of Consumers Director Joanne Hsu. 
Consumers sense significant uncertainty regarding the economy&#8217;s direction, although there is little evidence to suggest the first presidential debate influenced their economic perspectives, she said. 
<h3 class="wp-block-heading">Market Reactions</h3>
Wall Street hovered in the green Friday, with all major indices showing gains by 10:10 a.m. in New York.
The S&amp;P 500, as tracked by the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) was 0.6% higher, while small caps, monitored through the iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>), outperformed larger caps, up 1.5%. 
Sector-wise, tech rebounded after Thursday&#8217;s sell off, with the Technology Select Sector SDPR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>) up almost 1%.
Read Now:
<ul>
<li><a href="https://www.benzinga.com/economics/macro-economic-events/24/07/39748331/june-producer-inflation-exceeds-forecasts-restrains-investor-euphoria-following-c">June Producer Inflation Exceeds Forecasts, Restrains Investor Euphoria Following Consumer Price Relief</a></li>
</ul>
Photo via Shutterstock.

US Consumer Morale Dips More Than Expected In July: Sentiment 'Remains Stubbornly Subdued'

The Producer Price Index released Friday revealed a higher-than-expected increase in June, surprising investors who had grown confident about interest rate cuts following the sharper-than-anticipated drop in the monthly Consumer Price Index inflation gauge <a href="https://www.benzinga.com/economics/macro-economic-events/24/07/39728268/inflation-slows-more-expected-to-3-in-june-heightens-expectations-for-rate-cuts-t">released a day earlier.</a>
On an annual basis compared to June 2023, the overall producer basket rose by 2.6%, reaching its highest point since March 2023. 
<h3 class="wp-block-heading">June PPI Report: Key Highlights</h3>
<ul>
<li>In June, the headline PPI for final demand rose by 0.2% month-over-month, rebounding sharply from the upwardly revised flat reading in May and surpassing economists&#8217; expectations – as tracked by TradingEconomics – of a 0.1% increase. </li>
<li>The June rise in the index for final demand is attributed to a 0.6% monthly increase in prices for final demand services, while the index for final demand goods decreased by 0.5%.</li>
<li>The 2.6% annual surge in the headline number represented a 0.2 percentage point increase from the upwardly revised May print, and topped estimates of 2.3%.</li>
<li>The core PPI – which tracks prices for final demand less foods, energy, and trade services – advanced at a 0.4% monthly pace, advancing from May&#8217;s upwardly revised 0.3% growth and surpassing estimates of 0.2%. </li>
<li>On an annual basis, the core PPI climbed by 3.1%, up from the previous 2.3% and marking the highest rate of increase since April 2023.</li>
</ul>
<h3 class="wp-block-heading">Market Reactions</h3>
Prior to the PPI report, traders had assigned a nearly 95% chance on a September rate cut, according to CME Group&#8216;s FedWatch tool.
The hotter-than-expected reading may now temper these heightened expectations, though it is unlikely to derail them altogether given the Federal Reserve&#8217;s stronger emphasis on consumer price trends.
Futures on major U.S. equity averages traded flat in Friday&#8217;s premarket trading. Treasury yields inched slightly higher across the board and the dollar recouped early session losses against peers.
On Thursday, tech stocks sold off despite a lower-than-expected CPI report, with the Invesco QQQ Trust (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>) tumbling 2.2%. Small caps rallied instead, with the iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>) roaring 3.6%, achieving the highest level since January 2022. 
Read Now:
<ul>
<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/07/39740280/yardeni-raises-s-p-500-year-end-target-to-5-800-hints-at-faster-than-expected-disco">Yardeni Raises S&amp;P 500 Year-End Target To 5,800, Hints At Faster-Than-Expected Discounting Of &#8216;Roaring 2020s Scenario&#8217;</a></li>
</ul>
Photo via Shutterstock.

June Producer Inflation Exceeds Forecasts, Restrains Investor Euphoria Following Consumer Price Relief

The major index futures traded narrowly mixed early Friday as the imminent release of the June producer price inflation report kept traders on edge as they await confirmation that inflation is sustainably decreasing. After moving sharply to the downside, bond yields have begun ticking higher, but gold futures slipped.
Traders may also focus on the <a href="https://www.benzinga.com/markets/equities/24/07/39744630/jpmorgan-citi-kick-off-big-bank-reporting-season-as-expectations-remain-muted-amid-economic-head">earnings report from big banks </a>as they herald the start of the reporting season. Analysts are optimistic about a healthy pace of earnings growth, with Factset estimating S&amp;P 500 companies to report cumulative earnings growth of 8.8% for the second quarter.
<figure class="wp-block-table is-style-stripes"> 
<table>
<tbody>
<tr>
<td>Futures</td>
<td>Performance (+/-)</td>
</tr>
<tr>
<td>Nasdaq 100</td>
<td>-0.07%</td>
</tr>
<tr>
<td>S&amp;P 500</td>
<td>+0.03%</td>
</tr>
<tr>
<td>Dow</td>
<td>+0.05%</td>
</tr>
<tr>
<td>R2K</td>
<td>+0.73%</td>
</tr>
</tbody>
</table>
<figcaption class="wp-element-caption"> In premarket trading on Friday,&nbsp;the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) rose 0.12% to $567.12 and the&nbsp;Invesco QQQ ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>) edged up 0.04% to $492.12, according to&nbsp;<a href="https://benzinga.grsm.io/lxquj26b2sag" target="_blank" rel="noreferrer noopener">Benzinga Pro data</a>.</figcaption></figure>
Cues From Last Session:
U.S. stocks closed Thursday&#8217;s session sharply lower, with the Nasdaq Composite and the S&amp;P 500 Index slumping from their all-time highs. These two averages opened on a positive note but fell steadily in the morning session. They saw a consolidation move around the lower levels and ended notably lower for the session.
The 30-stock Dow Jones Industrial Average opened lower but recovered in early trading and moved mostly below the unchanged line before settling marginally higher.
The decline came amid the release of a tamer-than-expected inflation report that sent bond yields lower and rate-cut odds spiking higher. Making sense of the contrarian move, economist David Rosenberg said, &#8220;Maybe it's realizing the data aren't exactly all that constructive for corporate pricing power or top-line growth.&#8221;
The noteworthy development during a largely negative session is the spike in small-cap stocks, with the iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>) settling 3.59% higher.
<figure class="wp-block-table is-style-stripes"> 
<table>
<tbody>
<tr>
<td>Index</td>
<td>Performance (+/-)</td>
<td>Value</td>
</tr>
<tr>
<td>Nasdaq Composite</td>
<td>-1.95%</td>
<td>18,283.41</td>
</tr>
<tr>
<td>S&amp;P 500 Index</td>
<td>-0.88%</td>
<td>5,584.54</td>
</tr>
<tr>
<td>Dow Industrials</td>
<td>+0.08%</td>
<td>39,753.75</td>
</tr>
<tr>
<td>Russell 2000</td>
<td>+3.57%</td>
<td>2,125.04</td>
</tr>
</tbody>
</table>
<figcaption class="wp-element-caption"> Insights From Analysts:</figcaption></figure>
Following the June inflation report, fund manager Louis Navellier said a Sept. 18 key interest rate cut is likely forthcoming and that should be clarified in the Federal Open Market Committee statement on July 31. The fund manager also sees support coming from earnings growth. &#8220;The expectations for the second quarter earnings remain very high with 8.8% forecasted annual earnings growth for the S&amp;P 500,&#8221; he said, adding that these are the highest forecasted earnings growth since the first quarter of 2022.
Upcoming Economic Data:
<ul>
<li>The Bureau of Labor Statistics is due to release its June producer price inflation report at 8:30 a.m. EDT. Economists, on average, expect monthly and annual headline inflation rates of 0.1% and 2.3%, respectively. This compares to the May reading of -0.2% and 2.2%, respectively. Core producer prices may have climbed 0.2% month-over-month and 2.5% year-over-year, up from 0% and 2.3%, respectively.</li>
<li>The University of Michigan will release the results of its preliminary July consumer sentiment survey, with the consensus calling for a slight rise in the index from June&#8217;s 68.2 to 68.5 in July. The forward inflation expectations readings of the report could also evince some interest.</li>
</ul>
See Also: <a href="https://www.benzinga.com/money/how-to-trade-futures">How To Trade Futures </a>
Stocks In Focus:
<ul>
<li>Tesla, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>) fell over 2% <a href="https://www.benzinga.com/premarket">in premarket trading</a> in an extended sell-off on reports of a potential delay in the Robotaxi unveil event.</li>
<li>JPMorgan Chase &amp; Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/JPM#NYSE">JPM</a>), Citigroup Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/C#NYSE">C</a>), Wells Fargo &amp; Company (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/WFC#NYSE">WFC</a>) and Bank of New York Mellon Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BK#NYSE">BK</a>) and Fastenal Company (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/FAST#NASDAQ">FAST</a>) are among the <a href="https://www.benzinga.com/calendars/earnings">companies reporting ahead of the market open.</a> Bank of New York Mellon rose 2% following the bank&#8217;s earnings release, JPMorgan fell moderately despite a beat and Wells Fargo slid over 5.5%.</li>
</ul>
Commodities, Bonds And Global Equity Markets:
Crude oil futures climbed for a third straight session and traded around the $83.50-a-barrel level, while gold futures fell after Thursday&#8217;s strong advance.
The 10-year Treasury note yield, which fell 1.64% on Thursday on the back of the CPI data, rose 3.9 basis points to 4.229%.
Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) slid below the $57K level, down over 2% over the past 24 hours.
The Asian stock markets closed Thursday&#8217;s session on a mixed note, with the Japanese, South Korean and Taiwanese markets pulling back sharply. Most other major markets in the region advanced, drawing clues from the U.S. inflation data. The Chinese market rose after mixed trade data kept stimulus hopes alive.
European stocks firmed up in early trading. 
Read Next: 
<ul>
<li><a href="https://www.benzinga.com/markets/equities/24/07/39743338/s-p-500-to-plunge-more-than-20-near-term-top-economist-breaks-down-broader-market-vs-small-cap-d">S&amp;P 500 To Plunge More Than 20% Near Term? Top Economist Breaks Down Broader Market Vs. Small-Cap Divergence After June CPI Report</a></li>
</ul>
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US Stocks On Track For Mixed Start Ahead Of More Inflation Data: JPMorgan, Wells Fargo Fall On Earnings

The stock market had a &#8220;buy-the-rumor, sell-the-news&#8221; move on Thursday after a <a href="https://www.benzinga.com/economics/macro-economic-events/24/07/39728268/inflation-slows-more-expected-to-3-in-june-heightens-expectations-for-rate-cuts-t">tamer inflation data</a> sent the major averages sharply lower, with the sell-off spearheaded by mega-caps and big techs.
What Happened: The Bureau of Labor Statistics&#8217; June consumer price inflation report showed that the month-over-month rate of the headline inflation came in at a negative 0.1%, the first drop in more than four years, defying expectations of a 0.1% rise. The year-over-year rate cooled off to 3% from 3.3% in May, below the 3.1% rate forecast by economists.
The core monthly and annual rates slowed to 0.1% and 3.3%, respectively, as opposed to expectations of 0.2% and 3.4%. 
The slowdown was facilitated by a slower rate of increase in shelter costs and prices of autos and gasoline falling in June. 
Commenting on the report, economist David Rosenberg said, &#8220;For a change, the stock market doesn't like a stellar CPI report. Maybe it's realizing the data aren't exactly all that constructive for corporate pricing power or top-line growth.&#8221;
See Also: <a href="https://www.benzinga.com/money/best-inflation-stocks">Best Inflation Stocks</a>
Implications For Market: The SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), an exchange-traded fund tracking the performance of the S&amp;P 500 Index, ended Thursday down 0.86% at $556.48, according to <a href="https://benzinga.grsm.io/register174">Benzinga Pro data. </a>However, the iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>), an ETF tracking the Russell 2,000 Index comprising small-caps, climbed 3.59%.
The divergence was noted by Rosenberg in a post on X, formerly Twitter. There hasn&#8217;t been a day like this with the S&amp;P 500 down size and the Russell 2000 ripping since October 2008, said the economist, citing data shared by CNBC. This could be a premonition of a further sell-off in the broader market over the near- to mid-term, he suggested.
&#8220;The S&amp;P 500 went down more than 20% over the ensuing five months,&#8221; Rosenberg said. A 10-20% pullback from a recent high is technically called a correction, while a slump of over 20% is said to push the market into bear-market territory.
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"> 
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<blockquote class="twitter-tweet" data-width="500" data-dnt="true">I just heard on CNBC that we have not seen a day like this with the S&amp;P 500 down size and the Russell 2000 ripping since October 2008.  Is that a factoid that should be making us feel good?  The S&amp;P 500 went down more than 20% over the ensuing five months.
&mdash; David Rosenberg (@EconguyRosie) <a href="https://twitter.com/EconguyRosie/status/1811492133188304915?ref_src=twsrc%5Etfw">July 11, 2024</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
</figure>
The major U.S. index futures mostly fell in overnight trading, suggesting more weakness could ensue on Friday but the producer price inflation due ahead of the market open could have a say on the market direction.
The futures market, however, has begun pricing in a more than 92%<a href="https://www.benzinga.com/markets/asia/24/07/39733667/inflation-data-sparks-rush-for-gold-real-estate-treasuries-yen-traders-see-september-rate-cut-as-don"> probability of a rate cut</a> at the September meeting. 
Benzinga&#8217;s Take: History may always not repeat itself, and this time, it could be different. Underperforming SMID-cap stocks of interest-rate sensitive companies are priming for a breakout and this could happen as soon as the Fed begins lowering rates. The overbought mega-caps could see some moderation in buying interest before fundamentals cushion any potential sharp downturn.
Read Next:
<ul>
<li><a href="https://www.benzinga.com/news/large-cap/24/07/39736302/tech-stocks-tumble-as-small-caps-reits-gold-miners-rally-soft-june-inflation-ignites-rate-cut-expe">Tech Stocks Tumble As Small Caps, REITs, Gold Miners Rally; Soft June Inflation Ignites Rate Cut Expectations: What&#8217;s Driving Markets Thursday?</a></li>
</ul>
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S&P 500 To Plunge More Than 20% Near Term? Top Economist Breaks Down Broader Market Vs. Small-Cap Divergence After June CPI Report

The larger-than-expected drop in the June Consumer Price Index inflation rate has fueled market expectations for interest rate cuts <a href="https://www.benzinga.com/topic/interest-rates">by the Federal Reserve.</a>
Investors no longer seem to have doubts and are assigning a 91% implied probability that rate cuts will begin as early as September 2024.
The upcoming Producer Price Index (PPI) inflation report, scheduled for release on Friday at 8:30 a.m. ET, will be crucial in determining whether producer price trends can continue to support rate-cut expectations or temper the optimism.
<h3 class="wp-block-heading">June PPI Preview: What Economists Expect</h3>
<ul>
<li>Producer prices in June are expected to rise 0.1% on the month versus an unexpected 0.2% decline in May, according to economist consensus estimates, as tracked by TradingEconomics. </li>
<li>On an annual basis, the PPI inflation is expected to accelerate from 2.2% to 2.3%.</li>
<li>Excluding food and energy, core PPI is expected to advance by 0.2% month-over-month, accelerating from the previous flat reading. </li>
<li>Annually, core producer prices are set to rise by 2.5%, up from 2.3% in May. That would mark the highest annual core producer inflation rate since August 2023. </li>
</ul>
<h3 class="wp-block-heading">5 ETFs To Watch Friday</h3>
On Thursday, traders favored markets poised to gain <a href="https://www.benzinga.com/markets/asia/24/07/39733667/inflation-data-sparks-rush-for-gold-real-estate-treasuries-yen-traders-see-september-rate-cut-as-don">from future rate cuts,</a> investing in sectors that could benefit from reduced borrowing costs, while penalizing assets that had already heavily discounted expectations of monetary policy shifts.
The producer inflation data will be pivotal in evaluating if this market momentum will persist. 
Among Thursday&#8217;s top-performing exchange-traded funds, we can definitely mention:
<ul>
<li>SPDR Homebuilders ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XHB#NYSE">XHB</a>) rallying 6.1%</li>
<li>Invesco Solar ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TAN#NYSE">TAN</a>) rising 4.4%</li>
<li>SPDR S&amp;P Regional Banking ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KRE#NYSE">KRE</a>) up 4.2%</li>
<li>iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>) up 3.6%</li>
<li>VanEck Gold Miners ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GDX#NYSE">GDX</a>) up 2.9%</li>
</ul>
Read now: 
<ul>
<li><a href="https://www.benzinga.com/general/politics/24/07/39731800/biden-cheers-inflation-progress-rate-cut-chorus-grows-louder-among-5-economists-this-is-just-wha">Biden Cheers Inflation Progress, Rate Cut Chorus Grows Louder Among 5 Economists: &#8216;This Is Just What The JayMan Needed&#8217;</a></li>
</ul>
Image created using artificial intelligence via Midjourney.

Market Vectors ETF Trust Market Vectors Gold Miners

Could June Producer Inflation Data Dampen Market Enthusiasm For Rate-Cut Winners? 5 ETFs To Watch Friday

In 2024, the share prices of large-cap companies have soared while small-caps have struggled. Thursday&#8217;s price action could mark a key reversal in <a href="https://www.benzinga.com/etfs/broad-u-s-equity-etfs/24/07/39673296/just-17-of-s-p-500-stocks-outperform-the-index-what-does-that-mean-for-the-market">this year&#8217;s trend</a>.
Price Action: The iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>), which tracks small-cap stocks, closed up 3.63% on the day. The iShares Russell 1000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWB#NYSE">IWB</a>), which tracks large-cap stocks, was down 0.66% on the day.
The difference between the two indexes&#8217; performances was therefore over 4%.
The Roundhill Magnificent Seven ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MAGS#NASDAQ">MAGS</a>), which tracks Microsoft Corp, Apple Inc, NVIDIA Corp, Alphabet Inc, Meta Platforms Inc, Amazon.com Inc and Tesla Inc, saw a big down day. The share prices of the Magnificent Seven collectively fell 4.49%.
Why it Matters: According to a <a href="https://x.com/edclissold/status/1811426303750643828">post</a> on X by strategist Ed Clissold, the Russell 2000 posted one of its best days ever compared to the Russell 1000 on Thursday. A difference between the two indexes of over 4% has only occurred on four occasions:
<ul>
<li>On Oct. 19, 1987, &#8220;Black Monday.&#8221;</li>
<li>On Oct. 10, 2008, during the Great Recession.</li>
<li>On Oct. 4, 2011, following a market low during the European debt crisis.</li>
<li>And on March 19, 2020, near the bottom of a pandemic-driven low.</li>
</ul>
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"> 
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<blockquote class="twitter-tweet" data-width="500" data-dnt="true">FWIW, here are Russell 2000/1000 ratio returns after the previous 4 cases. Mixed bag. 2/2 <a href="https://t.co/fXKeKtm61t">pic.twitter.com/fXKeKtm61t</a>
&mdash; Ed Clissold (@edclissold) <a href="https://twitter.com/edclissold/status/1811426470499319950?ref_src=twsrc%5Etfw">July 11, 2024</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
</figure>
All of the dates mentioned above occurred during periods of decline; the latest addition to the list is an outlier, as the S&amp;P 500 index is near an all-time high. Alternatively, Thursday&#8217;s results could suggest outcomes similar to historical performance following 4% days.
Small caps seemingly benefited from Thursday&#8217;s <a href="https://www.benzinga.com/economics/macro-economic-events/24/07/39728268/inflation-slows-more-expected-to-3-in-june-heightens-expectations-for-rate-cuts-t">cooler-than-expected</a> June consumer inflation report, which could play a part in preempting interest rate cuts later this year. The higher-for-longer interest rate environment <a href="https://www.benzinga.com/news/24/05/39013274/newedge-wealths-cameron-dawson-talks-prolonged-high-interest-rates-on-premarket-prep">benefitted large-cap</a> companies with extensive cash piles and hurt smaller businesses reliant on debt.
Also Read: 
<ul>
<li><a href="https://www.benzinga.com/markets/asia/24/07/39733667/inflation-data-sparks-rush-for-gold-real-estate-treasuries-yen-traders-see-september-rate-cut-as-don">Inflation Data Sparks Rush For Gold, Real Estate, Treasuries, Yen: Traders See September Rate Cut As Done Deal</a></li>
</ul>

MAGS

The Market Did Something Thursday That Has Only Occurred 4 Times In History

Nasdaq tumbles 2%, S&P falls 1%, and Dow tags 41K as rotation out of tech stocks continues

Dow tops 41K, Nasdaq sinks 2%, S&P falls as well as rotation ramps up

Bullish Breadth Overrides The Bear's Bubble

Nasdaq plunges 2.3% and is on pace for its worst trading day of 2024

The VIX made a bottom in May and has slowly trended higher at the same time as stock prices have also gone up.

Bye Bye Semiconductors, Hello Small Caps - Generational Move

Nasdaq slips 2.7%, on pace for its worst trading day of 2024

Nasdaq slips 2.7%, on pace for its worst day in 18 months

The Russell 2000 is among the ETFs with the largest fund inflows - JPM

It was a hard fall, but one day does not a bear market make.

Sellers Strike As S&P And Nasdaq Gap Down

QQQs not only failed to clear the July range high but is close to the July range low.

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