‘So Bad It’s Good’: Buying Window Opens for Battered Small Caps

The smallest US stocks have entered a historically favorable time of year, boosting hopes that the beleaguered group can rebound after a dismal start to 2025.

Small-cap stocks have outpaced their bigger counterparts 60% of the time in June since 1990, according to an analysis from Evercore ISI strategist Julian Emanuel. That seasonality has been even more pronounced when larger stocks are trouncing smaller ones, as they are this year: In those instances, the returns of smaller stocks have bested the larger peers in June every single time.

Such a period would be a long-awaited bright spot for small-cap ...