Don't get blinded by the Fed rate cut trade and the signs of life in small cap stocks

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Investors are looking for stocks that can be super-charged by lower borrowing costs. That has led to interest beyond the mega caps.

With the Federal Reserve now cutting interest rates, investors are looking for stocks that can be super-charged by lower borrowing costs. That has led many investors to look beyond the biggest companies in the world to other parts of the market that have been lagging. The Russell 2000 is one of those places. Despite Thursday's dip, the small-cap index has been trading near 52-week highs.

A television station broadcasts the Federal Reserve's interest rate cut on the floor of the New York Stock Exchange on Sept. 18, 2024.With the Federal Reserve now cutting interest rates, investors are looking for stocks that can be super-charged by lower borrowing costs. That has led many investors to look beyond the biggest companies in the world to other parts of the market that have been lagging.

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