Russell 2000 Skyrockets to Record High Amid Trump Tax Cut Hopes

The Russell 2000 index for small cap U.S. companies reached a record high, driven by anticipated tax cuts and lower borrowing costs under a potential Trump administration. Since the U.S. presidential election, the index has surged over 8%, buoyed by investor optimism and Federal Reserve monetary policy easing.

The Russell 2000 index, which tracks small cap companies in the United States, soared to a record high on Monday. This upswing was bolstered by expectations of tax cuts potentially introduced by a second Donald Trump administration, alongside the promise of lowered borrowing costs.

Reaching an all-time high of 2,458.9913, the index climbed 2.1%, surpassing the previous record set three years prior. Since the U.S. presidential election on November 5, the index has shown a robust performance, gaining more than 8%.

Investors are hopeful that Trump's administration, with the backing of a Republican Congress, will deliver on promises of reduced taxes, import tariff increases, and deregulation. These factors are believed to be major drivers for the current momentum in small cap stocks, which have been spotlighted since the Federal Reserve's monetary easing began in September, with expectations of strong performance in a low-interest-rate environment.

(With inputs from agencies.)