US Smallcap stocks outperform their larger peers by the most in seven years

Smallcap stocks on Wall Street have registered their longest winning streak over their larger peers in the last seven years.

The Smallcap Russell 2000 index closed at a record high on Monday and extended its outperformance over the S&P 500 for the seventh straight session. The previous instance of such a move was back in January 2019, when markets rebounded from the cusp of a proverbial "bear market."

A combination of potentially lower interest rates, which generally benefit smallcap stocks more in comparison to largecaps, coupled with resilient economic data has spurred the upmove in the smallcap index.

Back then, the S&P 500 had declined 9.2% in December 2018, while the Russell 2000 had declined 12% amidst concerns of a trade war with China, rising interest rates and fears of an economic slowdown.

When the markets saw a rebound in January 2019, the Russell 2000 had jumped 11%, while the S&P 500 had gained 7.9%.

US markets shrugged off concerns surrounding the Fed's independence on Monday, and while futures were down over 350-400 points, the indices ended in the green.

The Dow Jones recovered nearly 600 points from the lows of the day to end higher, while the S&P 500 is now just 23 points adrift of the 7,000 mark. Nasdaq's outperformance on Monday was led by Alphabet, which crossed $4 trillion in market capitalization.