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According to Yahoo Finance, on 9/22 the Dow dropped 0.35%, the S&P 500 dropped 0.84%, Nasdaq dropped 1.37%, and the Russell 2000 dropped 2.26%. It was at 1803 at 1:45 Wednesday before the announcement, and 1722 (4.5% lower) by the end of day Thursday. The Dow went from 30880 to 30076 (1.0% lower).

Why were small caps overall (even biotech stocks with price to book ratios under 1, it seems) affected by the rate hike (or the threat of a higher final rate) so much more than large caps?

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  • Actually, a lot of articles have been written about the relative performance of small cap stocks vs. large cap stocks during periods of rising interest rates. It has been observed that small cap stocks have larger price drops in this situation and a number of explanations have been theorized. Sep 25 at 4:57
  • It sounds like the question could be answered with citations; it's just a pity they weren't given. When I ask a question on StackExchange there is usually something wrong with it, and what is wrong with it is that I asked it on StackExchange. Full stop. Sep 25 at 21:31

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