IWM is up 18.75% over the last six months and trading just 0.45% off all-time highs.

The Russell 2000 is having a moment.

Small-caps are more rate-sensitive than their mega-cap cousins. These companies tend to carry more floating-rate debt, so when the Fed cuts, their borrowing costs drop and margins expand. Simple math.

And right now, the market is pricing in cuts. IWM is responding accordingly.

The ETF is up 1.16% on the week, 2.84% on the month, and sitting at $251.64. It's trading above its 20-day, 50-day, and 200-day moving averages. The technicals look clean.

Here's what's interesting: IWM saw $2.28 billion in net inflows over the past month. That's a 3.26% jump in assets.

But zoom out and the picture gets messier. Year-to-date, the fund has seen $7.7 billion in outflows. Investors spent most of 2025 pulling money out of small-caps and piling into mega-cap tech.

That flow is starting to reverse.

Small-caps have been a frustrating trade. They've lagged large-caps for years while everyone chased the Mag 7.

But the rate cut narrative changes the calculus. Lower rates help smaller companies more. And with IWM's RSI at 61.73, there's room to run before things get overheated.

The seasonality is working too. Small-caps historically outperform in December and January.

If you've been waiting for a rotation, this might be it.