The story in equity markets for the past six months has been tech stocks outperforming value, in part due to expectations of a recession, in part due to the AI boom, in part due to poor commodity prices and in part due to bank-heavy value indexes that have been beaten up.

That's left the Russell 2000 behind this year but today's price action offers promise.

Russell 2000 chart daily
Russell 2000 daily

As you can see, it's surged more than 3% and broken the April/May highs. That's a bottoming indication and there isn't much resistance until 1890, which is another 4% higher.

The key for the index was the shift from Fed officials towards skipping a hike at the June meeting. While a hike may still come in July, the market is increasingly confident that will be the last one. With that, the odds of a harsh, Fed-induced recession are lower.