US small-cap companies have been the biggest winners since Donald Trump was elected US president.
Since the election, the New York-based Russell 2000 Index of small-cap stocks has seen 11 straight sessions of gains and its longest winning streak since 2003. The index has risen 10 percent since election day and has significantly outperformed the S&P 500, which has seen a 2 percent climb.
Two factors seemed to have played a role. First, hopes for a pro-business combination of a Trump presidency and a Republican Congress have lifted US stocks broadly. Second, some analysts believe small stocks could benefit more because they are less exposed if Trump takes a more protectionist approach to trade, especially if the dollar continues to rise.
These developments, along with the growing backlash against globalization seen in statements made by Trump, could hurt multinationals and leave smaller, domestic companies relatively better off.
Some of the biggest small-cap winners since the election have mirrored trends in the S&P 500 with a shift into pharmaceuticals and biotech stocks, based on speculation that a Republican administration is less likely to prioritize drug price controls than a Democratic one.
Shares in PTC Therapeutics, a 300-workforce biopharmaceutical company in New Jersey, have risen by 141 percent since November 8.
Trump’s proposal for $1 tn in new infrastructure construction has also lifted other small caps. Scorpio Bulkers, a small shipping company, has seen a 50 percent boost in its stock since the election.
