Small-capitalization stocks came under pressure Tuesday as the Russell 2000 index fell nearly 1 percent, reflecting broader investor caution over interest rate expectations, economic growth signals and shifting sentiment in the equity markets.

The Russell 2000, a benchmark tracking about 2,000 smaller U.S. companies, closed at 2,982.49, down 27.05 points or 0.90 percent. The decline added to recent volatility for small-caps, which have shown sensitivity to macroeconomic developments including Federal Reserve policy signals and corporate earnings trends.

Smaller companies often face greater exposure to domestic economic conditions, higher borrowing costs and sector-specific challenges compared with large-cap peers. Tuesday's drop came as investors weighed mixed data on inflation, consumer spending and business activity while monitoring geopolitical developments and corporate results.

The session's move extended a pattern of uneven performance for small-caps this year. While the Russell 2000 has posted gains in 2026 amid hopes for economic resilience, it has trailed major large-cap indexes at times amid concerns over persistent inflation and the pace of monetary easing.

Market participants pointed to several factors influencing Tuesday's trading. Renewed focus on the Federal Reserve's upcoming decisions contributed to caution, with some investors scaling back expectations for aggressive rate cuts later in the year. Higher-for-longer interest rates tend to weigh more heavily on smaller firms that rely on borrowing for expansion.

Broader market indexes showed mixed results. The S&P 500 and Dow Jones Industrial Average traded with........

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