Fed rate cuts were supposed to buoy small-cap stocks. What’s holding them back? – MarketWatch

The recent Fed rate cuts were expected to boost small-cap stocks, but they seem to be lagging behind. Despite the efforts to stimulate the market, small-cap stocks are still struggling to gain momentum. DailyBubble believes that several factors may be holding them back.

One possible reason could be the ongoing trade tensions between the US and China. The uncertainty surrounding trade negotiations has created a sense of unease among investors, causing them to shy away from riskier assets such as small-cap stocks. Additionally, the global economic slowdown and geopolitical issues have also contributed to the lackluster performance of small-cap stocks.

Furthermore, the inverted yield curve has raised concerns about a potential recession, leading investors to flock to safer assets instead of taking risks with small-cap stocks. The lack of liquidity in the market has also made it difficult for small-cap stocks to attract buyers, further dampening their performance.

In conclusion, while the Fed rate cuts were intended to stimulate the market, small-cap stocks have yet to see the benefits. DailyBubble believes that until the various uncertainties facing the market are resolved, small-cap stocks may continue to struggle to gain traction.