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The bull run in small-cap stocks continues as the Russell 2000 index hits successive all-time highs.

The Russell 2000, the leading index of small-cap stocks in the U.S., ended trading on Oct. 27 at a record high of 2,520.44. It was the index's second consecutive record close.

The Russell 2000 has now gained 28% over the past six months, outpacing the 23% return in the benchmark S&P 500 index that is comprised of small, medium, and large-cap stocks.

Until now, the small-cap stock index had not hit a new high since 2021 at the peak of the Covid-19 market rally.

Analysts say that small-cap stocks are attracting a growing amount of attention from investors as the current market rally broadens out beyond mega-cap technology stocks.

Names such as Nvidia (NASDAQ: $NVDA ) and Meta Platforms (NASDAQ: $META ) that are associated with the artificial intelligence (A.I.) trade continue stampeding higher.

However, so too do smaller capitalized stocks such as Oklo (NYSE: $OKLO ), Cipher Mining (NASDAQ: $CIFR ), and Super Micro Computer (NASDAQ: $SMCI ).

Analysts add that investors are turning towards small-cap stocks as their valuations are lower and they are perceived to be cheaper than many overvalued large-cap stocks.

At the same time, the entire U.S. stock market is benefitting from tailwinds that include a U.S.-China trade deal, manageable inflation, and expected interest rate cuts.

The U.S. Federal Reserve is widely expected to lower interest rates by 25 basis points at the conclusion of its policy meeting on Oct. 29.

That would be positive for small-cap stocks as smaller businesses tend to borrow more money to fund their operations.

Some analysts say they expect small-cap stocks to continue outperforming the broader market through year's end and into 2026 as interest rates continue moving downward.