The bull market will continue into 2025, according to Piper Sandler, and this time it will be led by gains in small caps. “We see compelling technical evidence suggesting that this bull market has room to continue thriving on skepticism and expanding further ‘down-cap’ throughout the upcoming year,” Piper Sandler chief market technician and chart analyst Craig Johnson wrote Wednesday. .RUT YTD mountain The Russell 2000 has gained more than 17% in 2024. Johnson says the Russell 2000 could be poised to notch a fresh closing record next year, which the small-cap index has not achieved since 2021. While the firm has a 2025 year-end price target of 6,600 for the S & P 500 , implying upside of 9% from Tuesday’s close, Johnson expects the small-cap Russell will outpace that clip. In 2024, the Russell 2000 is up 18%, compared to the S & P 500’s 27% advance. Historically, the third year of a bull market typically sees the S & P 500 return 5.2% on average, while small caps usually register double-digit returns, Johnson added. The chart analyst’s view comes as the S & P 500 climbed on Wednesday following a November consumer inflation report that matched expectations . Small-cap stocks were key beneficiaries of the election of President-elect Donald Trump in November, as investors viewed his policies on deregulation as being especially friendly for smaller businesses. Further, Wall Street views Trump’s stated plans to implement stiff tariffs on Chinese imports as beneficial to U.S. domestic production. Piper Sandler is not alone in its forecast of small-cap outperformance moving forward. Earlier this week, Jefferies took a similar stance . Fundstrat’s head of research Tom Lee shortly after the November election said he also expects small-cap stocks to outperform moving forward.