When examining the U.S. size and style action on the Asset Class Group Scores page small cap groups have continued to show leadership thus far during 2026.
After three consecutive weeks of positive action for all U.S. indices with most reaching highs either toward the end of last week or early this week, most are flat to slightly negative for the week through Thursday’s (4/23) close. While not the top performing U.S. equity index during the second quarter or in recent weeks – that title belongs to the Nasdaq Composite (NASD) or Nasdaq-100 depending on the timeframe – the Russell 2000 Index (RUT) has been hot on their heels and outperformed other U.S. equity indices like the S&P 500 (SPX) off recent lows. For the second quarter so far, RUT has gained 11.17% (3/31 – 4/23), which places it up more than 11.81% year-to-date and the top performing U.S. equity index for 2026 so far.
On the trend chart, RUT returned to a buy signal and moved back into a positive during the first full week of April’s trading before climbing higher to clear prior highs toward the end of last week and mark a new all-time chart high during Tuesday’s (4/21) trading at 2800. Even with the slight pullback from Tuesday to Thursday’s close, the chart continues to maintain its current column of Xs. While an extended column of Xs, RUT resides on the threshold of what NDW would qualify as overbought and out of actionable range based on the weekly OBOS reading in the 60% range. Further extension and a move toward the top of the 10-week trading band would meet this criterion, while a pullback toward the prior highs in the lower 2700 range would be constructive, healthy chart action.
When examining the U.S. size and style action on the Asset Class Group Scores page small cap groups have continued to show leadership thus far during 2026. The line graph below shows the All-US Small Cap group have also improved in average score to a larger magnitude off the late March low points versus its All US Large and Mid-Cap counterparts.
When looking at just the U.S. Style view on the ACGS page the Small Cap Value, Blend, and Growth groups currently score higher than their Large and Mid-Cap Value, Blend, and Growth counterparts. Additionally, all three Small Cap Value, Blend, and Growth groups score above 4 and rank among the upper echelons in terms of positive score direction, a measure of near-term score improvement.
While the near to intermediate term shows technical strength and superiority for small caps, the long-term relative strength within DALI and elsewhere favors large caps still for the time being. With the other size and style groups maintaining sound technical pictures as well, small caps still have competition. When examining client portfolios and considering strength within all three size and style groups small caps are likely a part of the conversation. As of Thursday’s close, more than half (120) of the 231 small cap ETFs and just shy 60% of the 887 small cap mutual funds on the NDW platform maintain fund scores north of 4 (out of 6).
