As the S&P 500 and Nasdaq climbed back to all-time highs last week, the Russell 2000 Index has now gone 913 trading days without setting a new peak, highlighting the weak performance of small-cap stocks in recent years.
This ongoing streak is the longest in 14 years and the third longest on record, according to The Kobeissi Letter, a market commentator.
The Russell 2000 remains about 10% below its previous all-time high, which was set in November 2021 during the pandemic bull market.
Even after rebounding nearly 28% from its April low, the index is flat for the year. By comparison, the S&P 500 is up 7% for the year, and the Nasdaq has gained 6.9%.
The Russell’s lackluster performance isn’t due solely to shifting investor sentiment or broader macroeconomic factors. According to The Kobeissi Letter, 46% of the companies in the index are currently unprofitable - the highest share ever recorded.
“Small caps are getting smaller,” the commentator said.
BREAKING: The Russell 2000 index has gone 913 trading days without hitting an all-time high, the longest streak in 14 years.
undefined The Kobeissi Letter (@KobeissiLetter) July 3, 2025
This also marks the 3rd-longest stretch in history.
The index is currently trading ~10% below its November 2021 peak.
While the Nasdaq 100 and S&P 500… pic.twitter.com/xCPRXu7YUg
Despite the Russell 2000’s underperformance compared to megacaps and the broader market, small-cap companies continue to pursue public offerings - a sign that investors remain eager to back new businesses.
2025 sees small-cap IPO mania despite elevated interest rates
Investors aren’t letting the poor track record of small caps deter them from backing new, smaller companies.
As Bloomberg reported, there were 94 initial public offerings through May this year, with companies raising a combined $12.9 billion, compared to 73 deals and $16 billion raised during the same period a year earlier.
This suggests that while the number of IPOs is rising, the average deal size is shrinking.
“It’s a positive signal as small-cap IPOs start to access the capital markets and do it so successfully,” said Will Braeutigam, who heads Deloitte’s U.S. capital markets transactions practice.
“If you’re going public, you’re less focused on the index and more focused on more specific comparisons similar to your business,” Effram Kaplan, managing director of Brown Gibbons Lang & Co, told Bloomberg.
The surge in small-cap IPOs is especially notable given the persistently high interest rates in the United States. Unlike its global peers, the Federal Reserve has kept rates unchanged this year as policymakers weigh the potential impact of President Trump’s proposed tariffs.
Although Fed officials are expected to start cutting interest rates later this year, the gap between U.S. rates and those of European central banks has widened significantly in 2025.
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