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Small-cap stocks, once seen as top beneficiaries of President Donald Trump’s policies, have now officially entered bear-market territory amid a massive market selloff after the White House's latest tariff announcement stoked recession fears in the world’s largest economy.

Wall Street on Friday suffered its biggest weekly retreat since the peak of the COVID-19 pandemic collapse in 2020. The panic was sparked by U.S. President Donald Trump's sweeping reciprocal tariffs announcement.

The Russell 2000 measure of small-cap stocks fell into a bear market after Trump outlined U.S. reciprocal tariffs. Read more here.

Small-cap stocks were expected to benefit from the Trump trade but are now being hit hard as the Russell 2000 (^RUT) falls into a bear market, down more than 20% from its all-time high. RH (RH) is plummeting on its underwhelming earnings and downgrade from Citi,

The Russell 2000 was on track to close in bear market territory on Thursday. The small-cap index was down 5.5% to 1,933.63, on track to close below the 1,953.62 level that would signify a 20% decline from a recent high.

The Nasdaq Composite index could end Friday in a bear market, down at least 20% from its recent peak. The Nasdaq level to watch is 16139.11, according to Dow Jones Market Data, which would require a 2.

The president’s tariff announcement Wednesday roiled global financial markets with economists rapidly raising the odds for recessions in economies around the world. Small caps were supposed to benefit from Trump’s purported focus on revitalizing American manufacturing,

The Russell 2000 index has officially entered bear market territory, falling more than 20% from its all-time high in late November 2024. The benchmark for small-cap US stocks has dropped 6.47%, dragged lower by recession fears,