[$$] Small Caps Set New Highs, Outpacing Their Multinational Peers

Shares of small U.S. companies climbed to a fresh record Wednesday, reflecting their gains in the recent tax overhaul and signs that U.S. growth once again looks more robust than that from overseas. The rally marks a remarkable rebound for small caps, which fell behind large stocks last year as investors poured money into multinational companies they felt were best positioned to benefit from a synchronized pickup in the global economy. The comparatively rosier outlook for the U.S. has drummed up fresh optimism among investors in small caps—especially with many expecting small companies, which tend to pay higher effective tax rates than multinationals, to get a boost from corporate tax cuts.