Banks play a critical role in the financial system, providing everything from commercial loans to wealth management and payment processing services. But concerns about loan losses and tightening regulations have tempered enthusiasm,
and over the past six months, the banking industry has pulled back by 6.9%. This drop was discouraging since the S&P 500 held its ground.
The Russell 2000 (^RUT) is home to many small-cap stocks, offering investors the chance to uncover hidden gems before the broader market catches on.
However, these companies often come with higher volatility and risk, as their smaller size makes them more vulnerable to economic downturns.
Federal Reserve Chairman Jerome Powell has dispelled any remaining uncertainty by signaling that the central bank is preparing to shift its monetary policy, effectively paving the way for imminent interest rate cuts.
