On Friday, the Russell 2000 index, which tracks small-cap stocks, achieved its first intraday record high since the onset of the U.S.-Iran conflict, indicating a broadening rally in equities. This milestone comes less than a month after the index confirmed a correction, defined as a decline of 10% from its peak. Small-cap stocks are particularly sensitive to shifts in interest rate expectations and inflation risks, making them vulnerable during periods of geopolitical tension. The recent spike in oil prices, triggered by the closure of the Strait of Hormuz, had raised inflation concerns, complicating the outlook for potential Federal Reserve rate cuts. However, following a ceasefire agreement in Lebanon, Iranian Foreign Minister Abbas Araqchi announced that the Strait of Hormuz was open, leading to a significant drop in oil prices and a boost in global risk assets. This year, the Russell 2000 has outperformed the S&P 500, the tech-heavy Nasdaq, and the Dow Jones Industrial Average, suggesting a shift in investor focus towards undervalued sectors as geopolitical risks diminish.