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Risk On! Why Small Caps Just Crushed the Market · The SPY Trader

• 0:00
  Welcome back to Spy Trader , I'm your host , Barry Bullish .
• 0:04
  It's 5 am on Saturday , November 29th , 2025 , Pacific time .
• 0:10
  We are wrapping up what was an absolutely stellar week for the market .
• 0:13
  Investors went full ' riskon , ' driving the major indices to their best performance since midyear , fueled primarily by mounting expectations of an imminent Federal Reserve rate cut .
• 0:25
  This dovish pivot has been a huge boost to risk appetite .
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  Let's hit the numbers .
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  The market experienced a strong upward surge , with the S&P 500 posting its best weekly gain since June , soaring between 3.73% and 4.47% .
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  The Nasdaq Composite led the charge with a huge 4.91% jump , benefiting heavily from optimism around technology and AI .
• 0:55
  Crucially , the Russell 2000 , representing smallcaps , crushed everyone , gaining 5.52% , signaling heightened investor risktaking .
• 1:06
  What drove this ?
• 1:07
  The bond market smells a rate cut .
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  We saw weakerthanexpected macroeconomic reports that reinforced this expectation .
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  Yields on the benchmark 10year U.S.
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  Treasury note fell significantly .
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  Additionally , cooling inflation signals , like the Core Producer Price Index rising less than anticipated , and slowing consumer spending reflected in the smallerthanexpected increase in September retail sales , were interpreted by the market as green lights for the Fed to ease policy soon .
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  This led to a clear rotation .
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  Consumer Discretionary was the top performing sector for the week , gaining 5.33% , boosted by optimism over Black Friday and Cyber Monday sales .
• 1:55
  Communication Services wasn't far behind , up 4.59% , thanks to its concentration of largecap growth companies .
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  Individually , we saw massive retail strength , with Kohl's surging over 56% for the week .
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  In tech , Intel jumped more than 10% on Friday on rumors it could become a foundry supplier for Apple processors , and memorychip maker Sandisk also jumped following its debut in the S&P 500 index .
• 2:26
  The only signs of profittaking were in giants like Nvidia , which slipped on Friday as investors reassessed its high valuation , and Eli Lilly , whose shares fell 2.6% for the day .
• 2:39
  So , what do we do next ?
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  The signal is clear : rates are likely coming down , favoring growth and risk .
• 2:46
  Our recommendation is a tactical tilt toward those ratesensitive areas .
• 2:50
  First , increase your Growth and Tech Exposure .
• 2:53
  Falling interest rates make the longterm earnings of highmultiple companies more valuable .
• 2:59
  A great instrument here is the Invesco QQQ Trust , or QQQ , which provides concentrated exposure to growth companies .
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  Second , capture the broadening rally by targeting SmallCap and MidCap .
• 3:13
  The Russell 2000's strong outperformance is a major signal .
• 3:16
  You can capture this efficiently within a diversified structure using the Vanguard Total Stock Market ETF , VTI , which covers large , mid , and small companies .
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  Third , always maintain your foundation .
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  Keep your core diversification solid using instruments like the SPDR S&P 500 ETF Trust , SPY .
• 3:39
  Finally , don't ignore fixed income ; while the bond market has rallied , diversified exposure through the iShares Core U.S.
• 3:47
  Aggregate Bond ETF , AGG , still offers stability .
• 3:52
  That’s all for this week , folks .
• 3:54
  Enjoy your weekend , and trade safely !