On Tuesday, the Russell 2000 Index, a key benchmark for small-cap stocks, reached a new all-time high during the trading session, continuing its strong upward trend this year. Having just set a fresh closing record on Monday, the index climbed another 0.7% on Tuesday, bringing its year-to-date gain to more than 13%.

Analysts note that as large-cap technology stocks show divergent performance, investors are shifting their focus to small-cap stocks, which offer more reasonable valuations and stand to benefit from the strength of the U.S. domestic economy. The robust performance of the Russell 2000 reflects market optimism surrounding expectations of Federal Reserve interest rate cuts, prospects for corporate tax reforms, and the resilience of domestic consumer spending. Additionally, recent signs of easing tensions between the U.S. and Iran have alleviated concerns about soaring energy costs, further boosting profit expectations for small-cap companies.