The iShares Russell 2000 ETF (IWM), representing small-cap stocks, has shown notable strength in July, reaching a five-month high and outperforming other major indices such as the Nasdaq-100 ETF (QQQ). On July 23, 2025, IWM gained up to 1%, leading the market's upside momentum while QQQ declined by approximately 0.25%. Market participants have observed a divergence between the strong performance of IWM and the weaker QQQ, with some traders positioning long August call butterfly spreads on IWM at the 230 strike price, which is seen as a potential gamma target. Open interest for these August $230 calls remains substantial, with around 185,000 contracts, some recently sold but the majority still held. This call butterfly strategy has reportedly doubled in value. Additionally, IWM has not reached all-time lows relative to the S&P 500 ETF (SPY), which is viewed as a positive indicator for small-cap stocks. Meanwhile, market breadth is mostly positive, although volatility index (VIX) futures have only modestly declined by 0.7% after a sharper drop overnight.