Traders work on the floor of the New York Stock Exchange (NYSE) as the opening bell rings on March 18, 2026.
Angela Weiss | AFP | Getty Images
of russell 2000 has fallen more than 10% from recent highs, making it the first major U.S. index to enter correction territory in 2026.
The small-cap index closed down 10.9% from Friday’s all-time high. A correction is defined as a decline of more than 10% but less than 20%.
Russell 2000, 1 year
In fact, small-cap stocks have outperformed since the beginning of the year, with the Russell 2000 down just 2% in 2026 as expectations for monetary easing and a shift away from large-cap stocks boosted the asset class.
However, as the Iran war continues, the benchmark value plummeted this month, causing a spike of more than 50%. brent crude oil futures. The Russell 2000 has significant exposure to cyclical sectors and is particularly sensitive to changes in oil prices and economic cycle slowdowns. It has fallen more than 7% this month.
“Small businesses are usually the first to be hit,” said Sam Stovall, chief investment strategist at CFRA Research. “Slower economic growth, stagflation, and even doubts about recession tend to have a more negative impact on small-cap stocks than on large-cap stocks, which leaves them in trouble.”
The Russell 2000 could soon be joined by other major averages. Both Nasdaq Composite and Dow Jones Industrial Average Both fell into correction territory on an intraday basis on Friday, but each closed slightly above that level.
of S&P500 is 7% off its recent high.
