Commentary

Small caps, big potential

Low valuations and likely rate cuts could make small cap stocks appealing.

By: Denise Chisholm

Updated: 8/22/2024

Key Takeaways

Interest rate cuts look increasingly likely, as the U.S. Federal Reserve (the Fed) weighs concerns about the U.S. economy and declines in inflation.
Historically, small stocks’ valuations have tended to increase relative to large caps’ after the Fed cut interest rates.
Low valuations and likely rate cuts could make small cap stocks appealing.

Get the full white paper

Small caps, big potential

Next steps to consider

Domestic Equity

Target your clients’ investment needs with our broad lineup of domestic equity solutions.

Learn more

Quantitative Investing

Find out how a blend of human insight, data, and technology can help uncover opportunity for your clients.

Learn more

Factor Investing

Help your clients’ investments achieve more precise exposure with our strategic factor-based investing approach.

Learn more

1161381.1.0

A6B16E834AAE4B3CB287FFAFD5449705

Past performance is no guarantee of future results.

Information provided in, and presentation of, this document are for informational and educational purposes only and are not a recommendation to take any particular action, or any action at all, nor an offer or solicitation to buy or sell any securities or services presented. It is not investment advice. Fidelity does not provide legal or tax advice.

Before making any investment decisions, you should consult with your own professional advisers and take into account all of the particular facts and circumstances of your individual situation. Fidelity and its representatives may have a conflict of interest in the products or services mentioned in these materials because they have a financial interest in them, and receive compensation, directly or indirectly, in connection with the management, distribution, and /or servicing of these products or services, including Fidelity funds, certain third-party funds and products, and certain investment services.

Registered investment products (including mutual funds and ETFs) and collective investment trusts managed by Fidelity Management Trust Company (FMTC) are offered by Fidelity Distributors Company LLC (FDC LLC), a registered broker-dealer. Fidelity Institutional Asset Management (FIAM) investment management services and products are managed by the Fidelity Investments companies of FIAM LLC, a U.S. registered investment adviser, or Fidelity Institutional Asset Management Trust Company, a New Hampshire trust company. FIAM products and services may be presented by FDC LLC, a non-exclusive financial intermediary affiliated with FIAM and compensated for such services.

Before investing have your client consider the funds', variable investment products', exchange-traded products', or 529 Plans' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or a summary prospectus, if available, or offering statement containing this information. Have your client read it carefully.

The use of the term "advisor(s)" throughout this site shall refer to both investment advisors and broker dealers as a collective term.