Big Tech, Small-Cap Stocks Rise at End of Week: Markets Wrap
(Bloomberg) — Some of the world’s largest technology companies extended their rebound in the final stretch of a week that saw a rush to smaller firms that tend to benefit the most in a scenario of economic resilience.
Despite the bounce in chipmakers amid bets on the sustainability of the artificial-intelligence trade, the S&P 500 struggled to gain much traction on Friday and was heading toward a weekly decline. Small caps kept rising, with the Russell 2000 beating the S&P 500 for an 11th straight session.
The fast-paced rally in small caps, sidelined for much of last year, has been fueled by a combination of falling interest rates and economic growth — dual tailwinds that many on Wall Street see as likely to propel the riskier group to market leading gains. So far this year, the Russell 2000 is up about 8% compared with a 1.5% gain for the S&P 500.
Going back to 1979, there are five other instances in which the small-cap gauge opened a lead of at least 500 basis points over the US equity benchmark in the first month of the year, according to Bloomberg Intelligence’s Michael Casper and Nathaniel Welnhofer.
The small-cap index kept its lead in four of those calendar years, BI said. The only exception was 2021, when unprofitable Russell 2000 companies were in a bubble. Though the S&P 500 closed some of the gap in three of those years, the Russell 2000 still ended with an average gain of 22.6% across all five instances.
“The favorable macroeconomic environment, characterized by contained inflation and accelerating growth, allows markets to withstand geopolitical tensions and continue their upward trajectory despite uncertainties,” said Florian Ielpo at Lombard Odier Asset Management.
Production at US factories unexpectedly increased in December and the prior month was revised higher, suggesting manufacturers gained some footing at the end of the year. This year, producers may find more favorable conditions in the wake of incentives for capital expenditures, diminished uncertainty about tariffs and lower financing rates.
The S&P 500 was little changed. A closely watched gauge of chipmakers climbed 1.7%. The Russell 2000 rose 0.4%. The yield on 10-year Treasuries advanced one basis point to 4.18%. The dollar fell 0.1%.
Corporate Highlights:
Paramount Skydance Corp.’s leadership has held talks in recent days with French President Emmanuel Macron amid a European charm offensive to garner support for its $108.4 billion hostile bid for Warner Bros. Discovery Inc. Movie theaters warned European Union merger watchdogs that a takeover of Warner Bros. Discovery Inc. by either Netflix Inc. or Paramount Skydance Corp. threatens to harm their industry. Walmart Inc. appointed new heads for its three main divisions, setting the stage for a new generation of leadership before the incoming top boss takes the reins in a couple of weeks. PNC Financial Services Group Inc. reported a 9% increase in fourth-quarter revenue, beating analysts’ estimates as financing and dealmaking by middle-market customers accelerated. DoorDash Inc. Chief Revenue Officer Lee Brown is departing the delivery app company after less than six months to pursue a new opportunity. HP Inc. was downgraded at Barclays Plc to underweight from equal-weight. Honeywell International Inc. rose after JPMorgan Chase & Co. raised the recommendation on the industrial company to overweight from neutral, writing it has “extended its discount” to a sum-of-the-parts valuation. Kraft Heinz Co. fell after Morgan Stanley downgraded the shares to underweight from equal-weight. Mosaic Co. slumped as the fertilizer company said North American demand “declined well beyond normal seasonal softness” in the fourth quarter due to a weak farmer economy and weather. Porsche AG’s deliveries fell 10% last year, the steepest drop since 2009 when the global financial crisis roiled markets, following weak demand for electric vehicles and a slump in China. Glencore Plc has agreed to buy at least 500,000 tons a year of hot briquetted iron from a planned Oman-based plant, securing supply of the low-carbon steelmaking input from 2030. Mitsubishi Corp. agreed to buy Aethon Energy Management LLC’s US gas and pipeline assets for $5.2 billion, the biggest purchase by a Japanese company in the American shale sector. Reliance Industries Ltd. reported a lower-than-expected quarterly profit as sluggish growth in the petrochemical and retail businesses offset a strong showing in its refining and telecom units. Some of the main moves in markets:
Stocks
The S&P 500 was little changed as of 10:07 a.m. New York time The Nasdaq 100 rose 0.2% The Dow Jones Industrial Average fell 0.1% The Stoxx Europe 600 fell 0.3% The MSCI World Index was little changed Bloomberg Magnificent 7 Total Return Index rose 0.3% Philadelphia Stock Exchange Semiconductor Index rose 1.7% The Russell 2000 Index rose 0.4% Currencies
The Bloomberg Dollar Spot Index fell 0.1% The euro rose 0.1% to $1.1625 The British pound rose 0.2% to $1.3404 The Japanese yen rose 0.5% to 157.85 per dollar Cryptocurrencies
Bitcoin fell 0.2% to $95,390.82 Ether rose 0.1% to $3,301.36 Bonds
The yield on 10-year Treasuries advanced one basis point to 4.18% Germany’s 10-year yield advanced two basis points to 2.84% Britain’s 10-year yield was little changed at 4.40% The yield on 2-year Treasuries was little changed at 3.57% The yield on 30-year Treasuries advanced one basis point to 4.81% Commodities
West Texas Intermediate crude rose 0.7% to $59.63 a barrel Spot gold was little changed ©2026 Bloomberg L.P.
