Russell 2000
Tracks approximately 2,000 small-cap U.S. companies, making it the most widely followed benchmark for smaller, domestically focused businesses.
Operator
FTSE Russell
Launched
1984
Country
United States
Methodology
Market-capitalization weighted, reconstituted annually to capture the smallest 2,000 companies within the broader Russell 3000 universe.
How Investors Use This Index
Small-cap companies in the Russell 2000 generally derive a larger share of their revenue from the domestic U.S. economy than the multinational giants that dominate the S&P 500, which makes this index a commonly used gauge of the health of the broader U.S. economy rather than just its largest exporters. Investors also watch the Russell 2000 relative to large-cap benchmarks to judge whether a market rally is broad-based — with smaller companies participating — or narrowly concentrated in a handful of mega-cap names.
Major Sectors
Frequently Asked Questions
How is the Russell 2000 different from the S&P 500?
The Russell 2000 tracks small-cap U.S. companies; the S&P 500 tracks large caps. Small caps are more domestically focused and more rate-sensitive.
Why do rate cuts often help the Russell 2000 more than large-cap indexes?
Small-cap companies carry more floating-rate debt on average, so falling rates reduce their financing costs disproportionately relative to cash-rich large caps.
What happens during Russell reconstitution?
FTSE Russell re-ranks the eligible stock universe each June and adjusts index membership accordingly, driving unusually high trading volume in affected names.
Is the Russell 2000 a good leading economic indicator?
It's a useful breadth signal — divergence between small-cap and large-cap performance often flags whether market gains are broad-based or narrowly concentrated.