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Data: Investing.com; Chart: Axios Visuals

When President Trump launched the U.S. into a trade war in 2018, many fund managers argued that small-cap stocks were poised to outperform because their business would be immune to tariffs and uncertainty.

What's happening: They did well over the course of that year but after Tuesday's 3.5% decline, the Russell 2000 index, which tracks many of the nation's small public companies, has fallen to near its closing level from February 2018.

The big picture: Whereas small companies previously drove innovation by disrupting bigger companies with new technologies and ideas, today many large companies can simply buy competitors to generate growth in-house.

  • Decreasing regulations play a role but so does the changing nature of big businesses, particularly in the United States and China.

What they're saying: “If big companies like Alibaba, Amazon, Facebook, Tencent are just going to keep on winning, then the concept of buying small caps changes,” Erik Weisman, chief economist at MFS Investment Management, told me.

  • “In a world where winners take all and just keep on winning, we don’t see small firms that show up on the public playing field.”

Go deeper

Supreme Court rejects GOP push to cut absentee ballot deadline in N.C.

Photo: Robert Alexander/Getty Images

The Supreme Court on Wednesday rejected an attempt by conservatives to shorten North Carolina's deadline for mail-in ballots from nine to three days.

The big picture: This is the latest of a series of decisions over mail-in ballot deadlines in various states.

Hurricane Zeta makes landfall on Louisiana coast as Category 2 storm

A satellite image of Hurricane Zeta. Photo: National Hurricane Center/NOAA

Hurricane Zeta made landfall along the southeastern coast of Louisiana as a Category 2 storm on Wednesday, bringing with it "life-threatening storm surge and strong winds," per the National Hurricane Center.

What's happening: The hurricane was producing maximum sustained winds of nearly 110 mph and stronger gusts.

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Politics: Biden ahead in Wisconsin, Michigan as cases surge in the Midwest.
  2. Health: Surge "is real" and not just caused by more tests, Trump's testing czar saysMask mandates help control rise in hospitalizations Some coronavirus survivors have "autoantibodies."
  3. Business: Surge is sinking consumer confidence Testing is a windfall.
  4. World: Europe faces "stronger and deadlier" coronavirus wave France imposes lockdown as Macron warns of overwhelming second COVID wave Germany to close bars and restaurants for a month.
  5. Sports: Boston Marathon delayed as COVID-19 surges MLB to investigate Dodgers player who joined celebration after positive COVID test.