The Russell 2000 is the most-interesting stock chart in the world
October 6, 2025 by Admin
Filed under Forex Tips
The Russell 2000 is up 1.0% today to a record high and it’s leading US major averages.
The index is heavy on financials, industrials and consumer discretionary, which means it’s a much better barometer of the underlying US economy than the tech-heavy Nasdaq or (increasingly) S&P 500.
There was a major double top in the index in 2022 and 2024 that foreshadowed the the 28% decline the culminated in late March. Since then though, the index has been steadily and quickly climbing. It’s now broken out and it’s a pretty picture.
The drop was a false breakdown and the measured target is 3000-3150, which is as much as 25% from here. For the broader economy, it points to a cyclical recovery; something that’s been brewing with the USD reacceleration trade. It would likely come with the Fed potentially pushing back on the 100 bps of easing priced in over the coming year.
The risks is that he index trades at 18.5 forward earnings which is historically rich
Russell 2000 historical P/E
A big catalyst for the Russell 2000 would be if the US Supreme Court began to block Trump’s tariffs.