Small-cap stocks celebrated their third consecutive week of gains, driven by growing investor optimism towards interest rate-sensitive industries and companies, bolstered by firm expectations of a Federal Reserve rate cut in September.
Markets are currently pricing in a 100% likelihood of a Fed rate cut in less than two months, and are factoring in nearly three rate cuts by year-end, according to CME Group's FedWatch tool.
This optimism is further strengthened by the absence of fears regarding an imminent economic slowdown, creating a landscape particularly favorable for small-cap stocks.
Economic data released this week revealed that...
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