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U.S. Small-Cap Stocks Rebound From Correction Territory

  • Russell 2000 rebounds Thursday after drop from March 15 high
  • Index had surged so much that it was ‘due for a pullback’

Small-cap U.S. stocks steadied from what was poised to be the longest slide since January, recovering from a retreat that came after Federal Reserve Chair Jerome Powell signaled that both fiscal stimulus and progress at beating back the pandemic are already baked into the central bank’s optimistic outlook.

The prospect that the steep rally in small-cap equities has gotten ahead of the nation’s growth prospects had driven the Russell 2000 Index down since Monday before reversing course with a gain Thursday. Before that midday turnaround the gauge was headed toward a correction, typically defined as a 10% drop from a peak.