The Russell 2000 popped nearly 2% on Wednesday for its best day in more than a month – and Fundstrat Global Advisors’ Tom Lee thinks the small-cap benchmark has even higher to go.

On a relative value basis, small caps are back to where they were in 1999, which was “a launch point for a 12-year outperformance period,” Lee, head of research at Fundstrat, said on CNBC’s “Last Call.”

“I think that means with the Fed doing a dovish pause and CEOs getting more confident, that means M&A and IPOs and people looking at other sectors – I do think the Russell can rise 50% this year,” he said. Indeed, the Federal Reserve held rates steady and kept to its forecast of three rate cuts in 2024 at the conclusion of its March meeting on Wednesday, lifting the major averages to record closes.

An array of factors could boost the Russell 2000 this year, he added, noting that companies that earn money in the small-cap index are trading around 11 times earnings, “a huge PE story, along with a price-to-book story.” The benchmark also has a big biotech weight, and the financial companies within the Russell 2000 are likely to benefit once the Fed begins cutting rates, he said.

“I think the Russell 2000 represents… the best of things that happen when the Fed starts cutting,” Lee said.

–Darla Mercado

Reddit priced its initial public offering at $34 per share.

That number is at the top of the expected range of between $31 and $34. It values the social media company at around $6.5 billion.

Reddit will make its public market debut Thursday under the ticker “RDDT.”

— Alex Harring, Leslie Picker, Jonathan Vanian

It’s not just institutional and individual investors pushing stock prices higher. Last week was huge for corporate buybacks of stock too, Bank of America equity and quantitative strategists including Savita Subramanian said in a note out Tuesday.

Buyback trends are “hitting multi-year highs,” BofA noted, with those conducted by the bank’s own corporate clients reaching the third highest weekly level ever in data going back to 2010.

The pace of repurchases is also “tracking above the typical seasonal levels at this time” of year for a second straight week, the strategists wrote. So far in 2024, buybacks as a percentage of the entire S&P 500 market capitalization have totaled 0.34% versus the 2023 high at the same time of year at 0.29%.

Buybacks over the past 52 weeks as a percentage of total market value are the highest since August 2020, during the first Covid pandemic summer, according to BofA.

— Scott Schnipper

With more than half of the trading week in the rearview mirror, the three major indexes are on track for gains.

The Nasdaq Composite has led the three higher this week, adding 2.5%. The Dow and S&P 500 were each up about 2.1%.

— Alex Harring

The big technology rally may be on “borrowed time,” according to UBS.

Strategist Jonathan Golub said the advances to Apple, Amazon, Alphabet, Meta, Microsoft and Nvidia could be short-lived. While valuations are not an issue in this case, he said an end to these major gains for the “Big 6” stocks is becoming a question of when, not if.

“With earnings momentum rapidly decelerating for the Big 6, and the broader market trend improving, continued outperformance of these stocks—and the narrowness of market returns that it implies—becomes increasingly difficult,” Golub wrote in a note to clients Wednesday. “While upward revisions are currently supporting these companies, the deceleration in future profits cannot be ignored.”

Golub’s call comes amid a year of strength for the sector, with the technology-heavy Nasdaq Composite up more than 9%.

— Alex Harring

These are some of the stocks posting notable moves in extended trading:

• Micron Technology — Shares popped 13% after the semiconductor company beat expectations on revenue and gave strong guidance for the measure. The company also posted earnings per share despite analysts forecasting a loss.
• Five Below — The value retailer tumbled 13% on weak fourth-quarter earnings and outlook for the current quarter and full year.

See the full list here.

— Alex Harring

Stock futures traded modestly higher shortly after 6 p.m. ET.

Dow futures added 0.1%. S&P 500 and Nasdaq 100 futures rose 0.2% and 0.3%, respectively.

— Alex Harring