With Fed QT (Quantitative Tightening) running at a pace of $95 billion a month and the Treasury forecasting its cash balance to rise by $200 billion into year end, that amounts to a squeezing of liquidity that alone implies an 8% drop for the S&P 500 by the end of December, according to their model.
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Small-Cap Stocks Outperform the S&P 500 as Market Leadership Broadens
Small-cap stocks are one of Wall Street’s strongest trades in 2026, quietly outperforming the S&P 500 and Big Tech. The Russell 2000 recently crossed the 3,000 line for the first time and has gained more than 20% this year, compared with roughly a 13% advance for the S&P 500.
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