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.
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.