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US stocks (^DJI, ^IXIC, ^GSPC) began Tuesday's trading session with mixed results as technology shares fell at the start. Morning Brief host Seana Smith and Yahoo Finance markets and data editor Jared Blikre are monitoring the market's movements, including volatility levels (^VIX), silver futures (SI=F), and the recent performance of the cryptocurrency Ripple XRP (XRP-USD). For more expert insights and analysis on the current market trends, you can find additional content on Morning Brief here.
The riskiest stocks are gaining attention, as the Russell 2000 index is close to reaching its first closing record in three years. It finished November with an 11% increase, outperforming other indices. Strong U.S. economic growth, attractive valuations, and potential interest rate cuts suggest that the index could reach 2500, especially since Russell 2000 companies earn about 80% of their revenue from the U.S. market.
US stocks are close to all-time highs as the new year approaches, prompting questions about how investors should adjust their portfolios for 2025. Kimberly Forrest, founder of Bokeh Capital Partners, suggests focusing on semiconductor stocks and small-cap companies, noting that those in the semiconductor sector related to AI may be overvalued. She also believes that mid-cap companies, often overlooked, have global potential and should be considered for investment.
November has been an outstanding month for U.S. stocks by nearly all standards.
Small-cap stocks have struggled since their peak during the pandemic, experiencing a significant drop in the bear market of 2022, especially as the high-performing stocks from that time fell the most. In 2023 and 2024, small caps continued to lag behind as investors concentrated on large-cap tech stocks, such as Nvidia, which have thrived due to excitement about the AI revolution. However, small caps have seen a rise since the election, as investors are optimistic that President-elect Donald Trump and a Republican Congress will implement business-friendly policies like tax cuts, reduced regulations, and increased tariffs.
Deutsche Bank predicts that the risks causing stock sell-offs will continue to be present in 2025.
Markets are looking forward to new economic information. Investors are eager to see how this data will impact their decisions. Everyone is waiting to understand the economic situation better.
Today, Black Friday is expected to generate over $12 billion in sales.
Vanguard is recognized for offering affordable ETFs, particularly the well-liked Vanguard S&P 500 ETF. For more than ten years, small-cap stocks have significantly lagged behind large-cap stocks. As of October 31, the average stock in the Russell 2000 small-cap index had a price-to-earnings ratio (P/E) of 16.9, while the average S&P 500 stock had a P/E of around 27.
These five small-cap stocks show great potential for growth in 2025. They are: TALK, RYAM, CSTL, PBAM, and RSSS.
- What is the Russell 2000 index?
- What is the symbol for the Russell 2000 index?
- How to invest in the Russell 2000 index?
What is the Russell 2000 index?
What is the symbol for the Russell 2000 index?
How to invest in the Russell 2000 index?
- ETFs
Buy shares of exchange-traded funds (ETFs) that track the Russell 2000 Index. These funds hold small-cap stocks similar to those in the index: iShares Russell 2000 ETF, Vanguard Russell 2000 ETF - Index Funds
Invest in mutual funds that follow the Russell 2000 Index.