The Russell 2000 has fallen more than 5% over the past month as 10- and 30-year Treasury yields soar to levels not seen since the early 2000s. The small-cap index is down about 16% relative to the Nasdaq-100, with its relative strength index at 12.77, marking just the fourth time since 1985 it has fallen below 14, after July 2007, August 2011 and March 2020. Small-cap stocks are particularly sensitive to higher rates because smaller companies have fewer financial resources and rely on borrowing to grow. Barclays identified several small caps that could outperform in the event of a bounceback, including Ultra Clean Holdings, Penguin Solutions and PTC Therapeutics.
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