Small-caps Rally Outpaces Large Caps Year-to-Date

The S&P SmallCap 600 has gained 23.4% year-to-date and 19.2% in the second quarter, outpacing the S&P 500, which is up 8.1%, and the Nasdaq-100, up 15.7%. The group of the seven largest technology stocks, often called the Mag 7, is down roughly 5.4% over the same period.

In a client note, Horizon Investments’ asset management team said the small-cap rally accelerated after April. The firm identified two main drivers: stronger U.S. economic growth that has benefited companies with mostly domestic operations, and a widening of AI-related capital spending into smaller technology and energy firms.

Horizon highlighted that the S&P SmallCap 600’s gains are not concentrated in a few semiconductor names. The firm reported broader participation across small-cap sectors, rather than reliance on a handful of stocks that have driven other market segments.

The S&P SmallCap 600 is an index that tracks U.S. small-company stocks. Horizon used publicly available and third-party data in its analysis. The firm prepared the commentary for clients and included standard disclosures that past performance does not indicate future results and that the note is for general information, not a solicitation to buy or sell securities.

Horizon also noted that information came from sources the firm considers reliable but may not be complete, and it emphasized that all investing involves the risk of loss.