Loss-Making Russell 2000 Stocks Drive Surprise Rally, Says Liz Ann Sonders

Liz Ann Sonders, the Chief Investment Strategist at Charles Schwab & Co. (NYSE:SCHW) highlighted certain unusual divergences in the small cap markets.

Unprofitable Small-Caps Lead The Rally

On Thursday, in a post on X, Sonders broke down the composition of the Russell 2000 index and the performance of its constituents, highlighting that “57% of index is currently profitable,” while “41% of index is currently unprofitable,” and “2% of index doesn't currently have earnings data available.”

She noted that the stocks losing money have been leading the charge higher in recent months. Since the Russell 2000's April 8 closing low, the profitable stocks on the index are up 22%, while the loss-making stocks are up 53%.

Stocks	Year-To-Date Performance	Latest Quarterly Loss
ThredUp Inc. (NASDAQ:TDUP)	+549.65%	$5.2 Million (Q2)
Opendoor Technologies Inc. (NASDAQ:OPEN)	+411.95%	$29 Million (Q2)
Vigil Neuroscience Inc. (NASDAQ:VIGL)	+373.53%	$26.7 Million (Q2)
Ramaco Resources Inc. (NASDAQ:METC)	+332.59%	$14 Million (Q2)
AST SpaceMobile Inc. (NASDAQ:ASTS)	+301.06%	$99.4 Million (Q2)
Digital Turbine Inc. (NASDAQ:APPS)	+284.66%	$14.1 Million (Q1)

See Also: Wall Street Hits Record Highs As Rate Cut Bets Offset Shutdown: This Week In Markets

Food for thought

Breaking down Russell 2000:

57% of index is currently profitable
41% of index is currently unprofitable
2% of index doesn't currently have earnings data available

Since 4/8/25 closing low:

Profitable part of Russell 2000: +22%
Unprofitable part of Russell…

— Liz Ann Sonders (@LizAnnSonders) October 8, 2025

Russell 2000 Outperforms The S&P 500

As of Thursday’s close, the Russell 2000 index, which primarily tracks small-cap U.S. equities is up 40.2% since its 52-week low on April 8th, following the “Liberation Day” tariffs. The S&P 500, on the other hand, is up 39.2% during the same period.

The small cap index, tracked by the iShares Russell 2000 ETF (NYSEARCA: IWM) touched an all-time high last month, following the 25-basis point interest rate cut by the Federal Reserve. The rate cut offered much-needed relief for smaller companies by lowering borrowing costs amid tough macroeconomic conditions.

The S&P 500, tracked by the SPDR S&P 500 ETF Trust (NYSE:SPY) was down 0.29% on Thursday, and is up 0.07% in overnight trade. The iShares Russell 2000 ETF was down 0.64% on Thursday, and is currently up 0.18% overnight.

Read More:

• Top Performing Small Cap Stocks

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