1. Small-caps may outperform S&P 500 in 2026 due to Fed rate cuts. 2. Russell 2000 earnings projected to grow 35% annually, outpacing S&P 500's 14%. 3. Valuations remain reasonable; Russell trades at 23.7 times expected earnings. 4. Lower rates may stimulate profit growth for non-tech companies. 5. MSFT and other large-cap tech face risks tied to AI investment.
FAQ
Why Neutral?
While small-caps may outperform, MSFT's technology dominance remains. Historical trends show tech stocks can rebound quickly.
How important is it?
The article highlights small-cap growth, which indirectly affects large-cap tech expectations, including MSFT.
Why Short Term?
Near-term rate cuts could affect market sentiment but MSFT's strong fundamentals may withstand volatility.