Why the Russell 2000 Is Lagging the S&P 500

The Macro Memo with Fexingo: Daily Conversations on Inflation, GDP, and Federal Reserve Policy · Jul 6, 2026 · 6m · transcript

The S&P 500 hit 7,483 on July 3, 2026, up 1.8% in a week, while the Russell 2000 fell 0.5% over the same period. Lucas and Luna drill into why small-cap stocks are getting left behind. They examine the yield curve environment — with the 10-year Treasury at 4.49% and the 2-year at 4.23% — and how higher borrowing costs hit smaller companies harder. They also look at the labor market: June payrolls grew just 57,000, yet the unemployment rate dropped to 4.2% as labor force participation fell to a 50-year low outside the pandemic. The hosts connect these dots to show why investors are favoring…