What it is
The Russell 2000 Index is a market-capitalization-weighted stock market index that serves as a benchmark for small-cap U.S. equities. It is a subset of the broader Russell 3000 Index, which represents the 3,000 largest publicly traded U.S. companies. The Russell 2000 includes the smallest 2,000 companies within the Russell 3000, making it a key indicator for the performance of smaller domestic businesses. Its constituents are updated annually during the "Russell Reconstitution."
The Russell 2000 is widely followed by investors and analysts to assess the health of the U.S. small-cap segment, often viewed as a proxy for the domestic economy because these companies tend to be more sensitive to U.S. economic conditions than large multinationals. Performance of the Russell 2000 is often compared against large-cap indices like the S&P 500 to identify potential trends in investor preference for smaller, growth-oriented companies versus larger, more established firms.
Why it matters
This index provides insight into the performance of smaller U.S. companies, which can offer different growth opportunities and risks than large-cap stocks.
Reviewed under editorial standardsUpdated September 26, 2026Not investment advice