Small Caps: The Little Engine That Could And Does

U.S. stocks reached record highs driven by AI optimism and earnings, while Nuveen highlights a strategic opportunity in small-cap equities due to attractive valuations and manufacturing recovery.

Key Takeaways

• 1.U.S. small-cap equities present a compelling opportunity due to historic valuation lows and strong domestic orientation which buffers them against geopolitical risks.
• 2.Recent U.S. manufacturing recovery (ISM PMI at 52.7) is a positive leading indicator for small business optimism and subsequent equity performance.
• 3.Despite a 'hawkish bias' from the Fed and zero priced-in rate cuts by markets, Nuveen maintains a forecast of one 25 bps reduction this year.

Table of Contents

• Bottom line up top
• Portfolio considerations
• About Nuveen’s Global Investment Committee
• Endnotes

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