Small-cap stocks had a big day on Tuesday.
The Russell 2000
a benchmark index for small-cap stocks made up of the 2,000 smallest stocks in the broad Russell 3000
jumped 3.5% to close at 1,799.33. That was its biggest one-day rise since Jan. 6, 2021, and its highest close since June 10.
It was part of a broad rally for stocks, with the large-cap benchmark S&P 500
jumping 2.8%, while the blue-chip Dow Jones Industrial Average
rallied 754.44 points, or 2.4%, and the Nasdaq Composite
gained 3.1%. All three saw their biggest one-day percentage gains since June 24.
It’s been a tough year for stocks, with benchmarks tumbling as inflation ran its hottest in more than four decades and investors brace for a Federal Reserve — and other major central banks — to continue aggressively tightening monetary policy in an effort to get prices under control. Investors increasingly fear the tightening necessary to squelch inflation will push the economy into recession.
The Russell 2000 remains off 26.3% from its record close of 2,442.74 hit on Nov. 8, 2021 and is down nearly 20% year to date in 2022. The S&P 500 is down 17.9% from its Jan. 3 record close and is off 17.4% so far this year.
Read: How high will the Fed have to push up interest rates to cool down inflation? No one knows