Wall Street Revives Big-to-Small Stock Rotation: Markets Wrap

Wall Street traders drove a rotation out of the tech megacaps that had powered stocks from the brink of a bear market. Bond yields rose as an increase in job openings dimmed the outlook for Federal Reserve rate cuts. The dollar remained at its lowest since 2022.

While the S&P 500 barely budged after notching all-time highs, a violent rotation took place at the start of July, with money chasing losers at the expense of recent winners. Momentum was unwinding at a pace not seen in over two years, and the small-cap Russell 2000 index beat the tech-heavy Nasdaq 100 by the most since April.