Small cap-focused Russell 2000 becomes the first of major U.S. benchmarks to enter correction territory

In this articleThe Russell 2000 has fallen more than 10% off its recent high, becoming the first of the major U.S. benchmarks to fall into correction territory. A correction is defined as a decline of more than 10% and less than 20%.Small caps actually outperformed to start the year, with the Russell 2000 just 1% off in 2026 as the hope of easier monetary policy and a pivot away from large caps boosted the asset class. But the benchmark has tumbled this month amid the ongoing war in Iran, which has spurred a more than 50% spike in Brent crude oil futures. The Russell 2000, which has greater exposure to cyclical sectors, is especially sensitive to changes in oil prices and a slowdown in the economic cycle. It's down more than 6% this month. The small cap index could soon be joined by other of the major averages.

The Dow Jones Industrial Average and the Nasdaq Composite were last more than 9% off their all-time highs. The S&P 500 was off by more than 6%. Got a confidential news tip? We want to hear from you.Sign up for free newsletters and get more CNBC delivered to your inboxGet this delivered to your inbox, and more info about our products and services.© 2026 Versant Media, LLC.

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