economy
Small Cap-Focused Russell 2000 Becomes First U.S. Benchmark to Enter Correction Territory
Small caps are especially sensitive to changes in oil prices and a slowdown in the economic cycle.
TL;DR
- The Russell 2000 is the first major U.S. benchmark to enter correction territory in 2026, down 10.9% from its all-time high.
- A correction is defined as a decline of more than 10% and less than 20%.
- The Russell 2000's decline is linked to the war in Iran, a spike in Brent crude oil futures, and concerns about economic slowdown.
- Small-cap stocks are more sensitive to changes in oil prices and economic cycles.
- The Nasdaq Composite and Dow Jones Industrial Average have fallen into correction territory intraday but closed just above those levels.
- The S&P 500 is 7% off its most recent high.