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Small-Cap Stocks Might Be Getting Ready to Run. 5 That Are Worth a Look.

The S&P 600, an index of small-cap stocks, rose 2.9% Friday, more than triple the percentage-point gain on the large cap The leap came after Federal Reserve Chairman Jerome Powell reassured markets that the bank is in no rush to raise interest rates. The average one-year forward earnings multiple for stocks in the S&P 600 is about 0.75 times that of the average for the S&P 500, according to The Leuthold Group. Usually, when small-cap profit forecasts are growing faster than those for large-caps, the small stocks outperform, Leuthold’s data show.

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