Small-caps up 22% in H1 2026... Is this rally actually real or are we all getting played?

IWM had its best first half since 1991. Up nearly 22%. That's not a typo.

And it's not just the headline number. Sixteen of the top 50 Russell 2000 performers are chip-sector names. AEHR, ICHR, MXL all up 400%+ at some point. The AI wave finally started trickling down to the smaller semiconductor suppliers instead of staying stuck in mega-cap land.

The expected EPS growth for Russell 2000 is 48% in 2026 vs 24% for the S&P 500. On paper that's a compelling setup.

Ngl the valuation part makes me a little uneasy though. IWM is sitting at 26x forward earnings, which is a 28% premium to the S&P. That's a lot to price in. And small-caps are notoriously rate-sensitive, so if the macro turns, this thing could unwind fast.

Pulled the chart history on moomoo and the last time small-caps ran this hard they gave back a big chunk of it within 12 months.

So yeah, great first half. But is anyone actually holding IWM into H2 or are you taking profits here? Feels like the risk/reward is getting harder to justify at these levels.