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Why Small Caps Are Getting Crushed in June 2026

Why Small Caps Are Getting Crushed in June 2026

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Lucas and Luna dissect the staggering divergence between the Dow, up just 0.4% in the past week, and the Nasdaq, down over 5%. They zero in on small caps: the Russell 2000 fell 2.5% in five days while value stocks actually gained. What's driving this? Rising core inflation, a hot jobs report that pushes Fed cuts further out, and a rotation away from rate-sensitive companies with floating-rate debt. Lucas breaks down exactly why smaller companies are more exposed to higher-for-longer rates, using JPMorgan and Bank of America as counterexamples of large caps benefiting from the same environment. They also discuss how the Fed's interest on reserve balances at 3.65% is creating a 'cash is king' dynamic that starves small caps of capital. A sharp, data-driven conversation about a market that's increasingly split between the haves and have-nots. #SmallCaps #Russell2000 #Nasdaq #DowJones #FederalReserve #InterestRates #ValueStocks #JPMorgan #BankOfAmerica #Inflation #JobsReport #MarketDivergence #Investing #Finance #FexingoBusiness #BusinessPodcast #June2026 #MonetaryPolicy Keep every episode free: buymeacoffee.com/fexingo
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