Why Small-Cap Stocks Slid Further Into Correction Territory on Monday | Global News Avenue

Small stocks fall further Correction area Stocks continued to stumble on Monday as economic uncertainty grew.

this Russell 2000 After falling more than 1% in the early stages of the session, it fell 0.3% in recent trading. The small benchmark index fell 10.3% from the record of 2,442.03 that ended in late November.

Small hat stock Soaring Russell jumped nearly 6% the day after his 2000 reelection after Donald Trump’s election victory. Trump’s relaxed regulatory growth agenda is expected to increase sales and reduce fees for smaller companies and release a series of acquisitions. Instead, uncertainty surrounding interest rates, tariffs and consumer demand have had an impact on the group.

Bank of America analysts wrote in a note on Monday: “Overall, sentiment has been optimistic, but many are concerned about the lack of catalysts…stimulating the little hat amid speed/policy uncertainty and increased valuation The performance is greater than that.”

The fourth-quarter revenue season did not enhance investors’ confidence in the small hat. While profits so far have slightly exceeded expectations, it has remained flat year-on-year, with analysts lowering estimates for the next 12 months. Bank analysis of revenue calls shows that sentiment is deteriorating among small companies.

The deregulation that Trump promised during his campaign could still benefit small companies and their stocks. But Trump’s trade protection could bring in revenue and encourage the Fed Keep interest rates higher,major The little hat’s headwindtends to carry more floating debt.

Another headwind of the little hat: stubborn inflation. Consumer price inflation accelerate For the fourth straight month in January, progress that showed the Fed’s drop of annual inflation to 2% may have stalled. Investors have Lower their expectations For further interest rate cuts this year.

Higher interest rates may also be lower Merger and Acquisition Activitiessome offset the benefits of a more relaxed regulatory environment. Bofa said most factors that drive mergers, such as growth background, support acquisitions. Although they predict that the transaction will benefit certain sectors, such as healthcare, technology and finance, from Russell 2000.