At the end of August, the S&P 500 Index was higher by 13% on the year. The S&P MidCap 400 Index was higher by 15% and the S&P SmallCap 600 Index was up 21%.

A great eight months across the board. In the January 2026 Market Minute, we wrote, "We believe mid- and small-cap stocks with double-digit earnings growth and low P/E multiples could be a good opportunity in the new year for investors looking for upside opportunity."

The earnings growth has been dramatically better than expected for each of the above three indexes so far this year. Stocks truly followed earnings growth this year with only modest changes in multiples. And in our view, that’s where an opportunity still exists.

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