Small-cap stocks, represented by the iShares Russell 2000 ETF ($IWM), experienced their strongest performance relative to large-cap stocks, tracked by the S&P 500 ETF ($SPY), since November 6, 2024, the day after the US presidential election. On August 12, 2025, $IWM gained approximately 1.75% during the day and was up 5.5% since achieving a golden cross technical indicator. The ETF also reached a 13-week high and demonstrated a 144 basis points outperformance over $SPY. Similarly, the S&P SmallCap 600 ETF ($IJR) posted its best day versus $SPY since the election, closing with nearly 2 percentage points of single-day alpha. Market participants attribute this rally to expectations of an upcoming interest rate cut, with small-cap stocks showing strong relative strength despite a slight increase in the 10-year Treasury yield. Trading activity included a notable 127% average true range at the high of the day for $IWM, indicating heightened volatility and a three-bar break upward. Investors have been positioning for this move, with some buying leveraged small-cap ETFs such as $TNA, using recent lows as stop-loss levels. The momentum in small caps contrasts with large-cap performance and reflects optimism about monetary easing in the near term.