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Small Caps Lag as Mega Tech Lifts Broader Market, Raising Economic Growth Concerns

  • Small-cap stocks are underperforming, signaling doubts about economic strength despite exuberance for AI stocks.

  • Key stock benchmarks that limit influence of megacaps also show weakness, like equal-weight S&P 500.

  • Russell 2000 is lagging behind largest stocks, on track for worst underperformance since 1998.

  • Many smaller firms not participating in upside as broader market is held up by tech giants.

  • Stock market may be sniffing out something data doesn't show yet, as it's forward-looking while data is backward-looking.

fortune.com
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