Russell 2000 Record Highs, Silver Rally to $60 Amid Fed Rate Cut Expectations (Dec 9, 2025)

This analysis is based on the Benzinga report [1] published on December 9, 2025. On that day, the Russell 2000 index hit a record intraday high of 2,541.77 (exceeding its 52-week high of 2,541.67) [0]. The Russell 2000 ETF (IWM) also reached a record intraday high of $252.95, closing at $251.66 (+0.56%) [0]. Small-cap stocks outperformed large-cap indices (S&P 500: +0.13%, NASDAQ: +0.40%) [0] due to their higher reliance on borrowing, making them more sensitive to expected rate cuts [0].

Concurrently, silver prices surged: spot prices hit $60.46/oz, futures reached $61.06/oz, and the iShares Silver Trust (SLV) closed up 3.00% at $54.99 with nearly double the previous day’s volume [0][3]. The rally was driven by two key factors: rate cut expectations reducing the opportunity cost of holding non-yielding precious metals, and a global supply crunch—particularly Chinese silver inventories at a decade-low [3][0].

Market sentiment reflected near-universal pricing of a 25 basis point (bp) rate cut, with some analysts predicting a “hawkish cut” (rate reduction paired with cautious forward guidance) [5][1]. This divergence in performance between small caps and large caps indicates investor rotation into more rate-sensitive assets ahead of the Fed’s decision.

1. Small-Cap Rotation
   : The Russell 2000’s outperformance signals investor confidence that rate cuts will alleviate borrowing costs for smaller firms, boosting their profitability [0].
2. Silver’s Dual Drivers
   : The metal’s record rally combines macroeconomic factors (Fed rate cut expectations) and microeconomic supply constraints, differentiating it from broader precious metal movements [3][0].
3. Hawkish Cut Risk
   : Traders’ anticipation of a cautious rate cut highlights market sensitivity to the Fed’s forward guidance—any deviation from expectations could trigger volatility [5].

• Fed Policy Surprise
  : A decision to hold rates steady or signal fewer future cuts than expected could lead to sell-offs in both small caps and silver [5].
• Silver Volatility
  : The metal’s rapid rally may be vulnerable to profit-taking, given its historical volatility [0].
• Economic Data Uncertainty
  : The Fed’s decision depends on incoming inflation and employment data, which remain uncertain [5].

• Small-Cap Profitability
  : Rate cuts could reduce borrowing costs for Russell 2000 companies, supporting long-term earnings growth [0].
• Silver Supply Tightness
  : Ongoing supply constraints may sustain silver’s upward trajectory if demand remains robust [3].

Critical data points from the event include:

• Russell 2000 intraday high: 2,541.77 [0]
• IWM ETF intraday high: $252.95 [0]
• Silver spot price high: $60.46/oz [3]
• Silver futures high: $61.06/oz [3]
• SLV daily return: +3.00% [0]

All findings are based on market data and expert analysis, providing context for decision-makers without prescriptive investment recommendations.