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"It's not a junk rally," Matt Bartolini, the firm's global head of research strategists, told CNBC's "ETF Edge" this week.

Bartolini cited a promising trend: more Wall Street firms are upgrading small-cap earnings expectations than downgrading them. This means higher earnings per share estimates for this year, including for the upcoming third and fourth quarters. He added that this quarter will likely see over 20% EPS growth.

He also cited stronger relative momentum, and the "depth and breadth" associated with the small-cap stock market. "You have all 11 small-cap GICS sectors outperforming their respective large-cap GICS sectors. That hasn't happened in over 30 years," Bartolini said.

He added that not-so-heavily shorted small-cap stocks are outperforming heavily shorted ones, which is a signpost of a sustainable rally. "If this was a snapback junk rally where it was a short squeeze, it would be the inverse," he said.

State Street's SPSM and SLYG, exchange-traded funds which track the S&P 600 Small-Cap and S&P 600 Small-Cap Growth indexes, respectively, are both up more than 20% this year, according to CNBC data. In the same timeframe last year, SPSM fell almost 2% and SLYG increased just 0.86%. 

The Russell 2000 Index – the most popular small-cap stock benchmark and the index underlying IWM, the iShares Russell 2000 ETF – is also up close to 20% this year, its best first half since 1991 when George H.W. Bush was in office.

"You have that fundamental momentum, the relative price momentum, [and] the idea that [the small cap trade] is more enduring," Bartolini said.

Performance of small-cap stocks versus large-cap stocks over the past year.

Phil McInnis, chief investment strategist at Avantis Investors, says the historic small-cap rally should be a signal to investors to look beyond the large-cap trade. "Some investors … don't even realize [that] if you're buying the S&P 500, yes, that's giving you pretty decent exposure to the stock market, but it's nowhere close to the full stock market," he said on "ETF Edge."

"I still see large-cap flows getting a lot more attention versus small caps," he added, citing combined mutual fund and ETF data. "I still think small caps are maybe being overlooked by a lot of investors, and I think there's a massive reason to have them in your portfolio."

Along with small-caps, McInnis — whose firm manages multiple small-cap funds among other stock and bond investments — is stressing non-U.S. developed markets, emerging markets, and mid-caps as other asset classes where investors should consider adding exposure. Emerging markets, in particular, have performed "tremendously well" over the last year, he said.

IEMG, the iShares Core MSCI Emerging Markets exchange-traded fund, is up more than 18% this year.

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Here's how Funnel Runners works. You find yourself in your average American suburb, with you and up to apparently seven of your friends facing off against a tornado. The devs have previously framed the game as one akin to survival horror, said tornado acting as the evil critter/beastie/figure hunting you down. Fun way of viewing such a thing! The whole goal is exploring the aforementioned city to find all of the prerequisite parts needed to repair your van so you can escape before the tornado gets too intense.

That means finding things like spare tires, oil for your engine, that sort of thing. You have a few tools at your disposal to help you get to the point of full repair too, with small things such as a flashlight for dimly lit buildings, or a radar to track where the tornado (or tornados, as they can multiply) is on the map, or a defibrillator to bring back one of your pals that's about to bite the proverbial bucket. There's a lot to manage, and you're at risk from things like lightning and fire too, not even considering the fact that seemingly entire hurricanes can form.

According to Supernova Studios, the game is technically done and fully playable, opting for an early access release in order to let those that play the game to help shape what's to come. There are plans for new areas, weather events, hazards, mission types, and more complex progression, with the current plan being that the game will be in early access for about a year. If any of this tickles your fancy, you can pick up the game on Steam now. %!s()

Very confidently for events like heat waves and heavy rainfall—but much less so for others, like thunderstorms and tornadoes—according to a major new report published Thursday by the United States' top science advisory body.

Entitled "Attribution of Extreme Weather and Climate Events and their Impacts," the 254-page paper updates a 2016 assessment by the same institutions, the National Academies of Sciences, Engineering, and Medicine (NASEM).

"Significant progress has been made over the last decade, with major advancements in methods and modeling that allow for more robust assessments of extreme events," said James Hurrell, a professor of atmospheric science at Colorado State University and chair of the committee that wrote the report.

Operating under a charter signed in 1863 by President Abraham Lincoln, the prestigious academies are independent nonprofit institutions tasked with advising the government on scientific policy.

But these are no ordinary times under the administration of President Donald Trump, who has attacked the very idea that burning fossil fuels is warming the planet.

Getting specific

Scientists have no such doubts. They have known for decades that climate change is altering the frequency and intensity of several types of extreme weather events, including hurricanes, heat waves and extreme rainfall.

But the field of attribution science allows them to move beyond detecting broad trends to investigating individual events—what the authors call extreme event attribution (EEA)—which can provide vital information to policymakers.

EEA studies compare an event's characteristics, such as its probability and intensity in the current climate, to a "counterfactual" world without human-caused emissions.

The authors found that EEA capabilities have improved markedly over the past decade, thanks to advances in understanding the physical drivers of events, expanded observational data from satellites and radar, new statistical techniques and better models.

But the gains are uneven, and significant challenges remain for certain types of events. Global models, for example, lack the resolution to capture climate change's impact on severe thunderstorms, even as confidence for hurricanes is higher.

Confidence estimates are also lower for underdeveloped parts of the world, where a lack of consistent, long-term records limits attribution science's reach.

Another emerging field is extreme event impact attribution (EEIA), which studies how far human-caused climate change has shaped the impacts of an extreme event—human health effects or economic losses, for instance. The authors said this subfield has enormous potential but remains in its infancy.

They also called for a common framework for attribution studies, noting that differing methods "sometimes lead to confusion among the public and other stakeholders when studies of the same event produce different results."

Sowing doubt

Still, the results are likely to boost the multitude of lawsuits working their way through courts across the country.

Oregon's Multnomah County, for example, is suing fossil fuel giants for more than $51 billion over pollution that fueled a deadly 2021 heat dome in the Pacific Northwest, during which hundreds died.

Ahead of the report's publication, Republican lawmakers sought to cast doubt on the authors' work, sending a letter in April to the president of NASEM alleging bias and demanding details on the authors' professional ties.

Energy In Depth, an oil industry blog, singled out Delta Merner, a scientist with the nonprofit Union of Concerned Scientists, for criticism in a Jan. 2, 2025, post, and she left the panel the same day.

At the federal level, the Trump administration has sued Democratic-led states pursuing climate damages claims against oil and gas majors and has sought to strike down state "Climate Superfund" laws requiring polluters to pay for the consequences.

Republicans in Congress, meanwhile, have introduced the "Stop Climate Shakedowns Act," a bill that would block climate damage lawsuits from proceeding in court—a move critics call a de facto immunity shield for fossil fuel companies.

Who's behind this story?

Andrew Zinin

Master's in physics with research experience. Long-time science news enthusiast. Plays key role in Science X's editorial success. Full profile →

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Citation: New science report could boost climate damage suits against oil giants (2026, July 16) retrieved 16 July 2026 from https://phys.org/news/2026-07-science-boost-climate-oil-giants.html

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