The 4.23% weekly gain led to the biggest three indexes in the Russell 2000. Also, the upcoming FOMC meeting could be a crucial price director for the small-cap index. Primarily, a rate cut by the Fed could be a positive outlook, increasing the possibility of valid upward continuation.
How Rate Cut Could Help Russell 2000
The expectation that the Federal Reserve will soon start cutting interest rates is probably helping Russell. Smaller shares are thought to benefit from the move to cut rates, particularly those that have fallen behind in the face of higher rates—as long as the marketplace can stave off an economic slump that would hurt corporate earnings.
On Wednesday, the Fed is anticipated to begin a sequence of rate reductions following a hike in borrowing expenses to the highest point in almost twenty years. According to LSEG data, markets are factoring in about 250 basis points of alleviation by the close of 2025.
One of the main concerns for investors may be whether the Fed will decrease rates promptly to prevent an imminent economic contraction.
