While not necessarily benefitting the everyday people, Trump’s corporate tax cuts have proved beneficial to small caps even in the midst of the trade war fears, and in part because of them.
Even with the uncertainties, investors are still tossing in their stocks and dollars.
If you are wondering if investors favor small caps over large caps, well, the answer is small caps. In the time of trade wars, export items are the ones exposed to the tariff battle.
Small caps companies don’t generally export the bulk of their output, so in the back and forth concerning tariffs, small caps aren’t affected by the tariffs on US made products.
While US tariffs on foreign goods can raise the cost of production, small caps have the aforementioned advantage in the event of a full-blown trade war.