Small Caps Flourish as US Earnings Growth Broadens Beyond Tech

Smaller US companies are enjoying a robust earnings season amid resilient economic growth, suggesting a recent market rotation away from technology heavyweights has further to run.

About 65% of Russell 2000 constituents have exceeded fourth-quarter profit expectations so far, the largest proportion since mid-2021, according to data compiled by Bloomberg Intelligence. By contrast, the beat rate for S&P 500 firms is the lowest in three quarters.