Russell 2000 Falls More Than 10% Into Correction Territory

The Russell 2000 is down more than 10%, placing the small-cap index in correction territory as inflation worries and concerns over higher interest rates weigh on smaller and cyclical stocks.

Investors have also been moving capital back toward dominant technology companies, adding pressure to small-cap and cyclical shares. The shift comes as smaller stocks have lost ground relative to large caps.

The Russell 2000-to-S&P 500 ratio, which compares small-cap stocks with large-cap stocks, recently reached its lowest level since November 2025. Its decline reversed a major portion of small caps’ outperformance earlier this year.