Are U.S. small-caps finally back?

2026-03-01 08:29:37

Abstract generation in progress

U.S. small-cap stocks have shown significant outperformance recently, reversing a long period of underperformance against large-caps. This rebound is attributed to improving fundamentals, including accelerated earnings growth driven by lower interest rates, reduced trade uncertainty, better regional banking conditions, broadening AI benefits, and fiscal stimulus. T. Rowe Price’s Asset Allocation Committee believes this rally is durable and has increased its overweight position in U.S. small-cap stocks.

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