American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Investing

Russell 2000 Index forecast as the crash continues: buy the dip?

by admin April 22, 2025
April 22, 2025
Russell 2000 Index forecast as the crash continues: buy the dip?

The Russell 2000 Index has plunged and formed a death cross this year as American stocks sink amid rising worries about Donald Trump’s policies. The index, which tracks the top small cap stocks in the US, traded at $1,840 on Monday, down by ove 25% from the highest point this year. 

Russell 2000 Index technical analysis

The daily chart shows that the Russell 2000 Index peaked at $2,465 earlier this year as investors cheered Trump’s proposed policies, like tax cuts and deregulation. 

All this changed after his inauguration and his focus on trade. He initially implemented large tariffs on Mexico and Canada. This trend accelerated earlier this month when he delivered his Liberation Day speech. 

The Russell 2000 Index has formed a death cross as the 200-day and 50-day moving averages crossed each other. It also fell below the ascending trendline connecting the lowest swings since April last year. 

The index has moved below the Ichimoku cloud indicator, while the Relative Strength Index (RSI) and other oscillators have moved downwards. 

Therefore, the small-cap Russell 2000 index will likely continue falling as sellers target the key support at $1,730, its lowest level this year and 5.9% below the current level. 

A drop below that level will indicate further downside, with the next key level to watch being the psychological point at $1,630. A move above the resistance level at $1,930 will invalidate the bearish outlook. 

Russell 2000 Index chart by TradingView

Why the Russell Index is falling

There are three main reasons why the small-cap Russell 2000 Index is falling. First, the Federal Reserve has maintained a more hawkish tone this year. Unlike other central banks like the European and Canadian one, the Fed has left rates unchanged this year. 

Small-cap stocks are more affected by high rates than large-cap stocks. For example, firms like Meta Platforms and Alphabet have billions of dollars on their balance sheets, which they generate interest income on. They also have lower debt levels.

Small-cap companies don’t have these funds in their balance sheet, meaning that they spend more on interest than what they receive. 

Second, these companies are mostly more domestic than those in the S&P 500 and Dow Jones. As such, they tend to do well when the US economy is doing well and lag when conditions change.

Analysts believe that the US may move into either a recession or stagflation this year because of Trump’s policies on tariffs. Polymarket data shows that recession odds have jumped to over 65%. 

Third, the index has dropped because of Trump’s tariffs, which are disrupting companies in most industries. For example, many small-cap retailers are now struggling as their import costs have jumped. Analysts also expect that demand will wane, affecting their earnings.

Further, the Russell 2000 index has dropped as investors rotate to safe havens like gold and the Swiss franc. One reason for this is that Trump is considering firing Jerome Powell, the head of the Federal Reserve.

Such a move would likely be challenged up to the Supreme Court. If it were allowed to stay, it would lead to capital flight from the United States, a market that has always been loved for the independence of the central bank.

Top Russel 2000 movers

Russell 2000 index are usually highly volatile, with some of them soaring by over 100% and others crashing by almost 100% in a certain period. 

CervoMed stock price has surged by ove 287% this year, making it the top-performer in the index. It is followed by ThredUp, a clothing thrift store that is benefiting from Trump’s tariffs as demand for used clothing rise.

The other top gainers in the Russell 2000 index are FuboTV, Agilon Health, Hertz Global Holdings, Radius Recycling, Digital Turbine, and Root.

On the other hand, companies like Sunnova Energy, ModivCare, Solo Brands, Open Lending, Harvard Biosciences, and Jasper Therapeutics have all plunged by over 80% this year.

The post Russell 2000 Index forecast as the crash continues: buy the dip? appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
Top crypto forecasts: Reserve Rights (RSR), IOTA, Solana, Pendle
next post
Can reselling jets made for China to Asian airlines manage headwinds for Boeing? Here’s what experts say

Related Posts

Here’s why the LVMH share price may rebound...

February 27, 2025

Top crypto price predictions: Bitcoin, XRP, Solana

June 18, 2025

Trump and the Gold Standard (Updated 2024)

April 3, 2024

AMD stock price forecast: set to surge after...

February 27, 2025

BT Group share price hits key level: can...

March 19, 2025

BP share price continues to underperform: is it...

April 3, 2025

Pi Network price analysis: a risky pattern emerges

April 14, 2025

Why has the Rolls-Royce share price jumped, and...

February 12, 2025

AMD stock price forecast: could crash 45% if...

March 14, 2025

USD/INR forecast: Indian bond yields plunge ahead of...

April 6, 2025

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • Zinc prices rally on US rate cut hopes, despite supply oversupply

      August 27, 2025
    • Mitsubishi exits Japanese offshore wind projects citing soaring costs

      August 27, 2025
    • FBI raid on John Bolton’s home in Washington linked to classified documents

      August 25, 2025
    • Argentine senate deals blow to Milei’s austerity agenda with university budget boost

      August 25, 2025
    • Jackson Hole Symposium: what Powell said about economic effects of Trump’s tariffs

      August 25, 2025

    Categories

    • Business (3,773)
    • Investing (2,787)
    • Latest News (2,050)
    • Politics (1,530)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved