Chewy Climbs 0.89% on Small-Cap Rally as Daily Volume Hits $250M at Rank 393

On August 8, 2025, Chewy (CHWY) closed with a 0.89% gain, trading with a daily volume of $0.25 billion, ranking 393rd among stocks by liquidity. The move aligns with broader momentum in small-cap equities, as easing monetary policy and favorable valuation dynamics reshape market sentiment.

Small-cap stocks have historically outperformed large-cap peers during periods of monetary easing, a trend amplified by the Federal Reserve’s rate-cutting cycle in 2025. Lower borrowing costs benefit companies with higher leverage exposure, enabling capital allocation for growth initiatives and margin expansion. Analysts highlight that small-cap valuations remain attractive relative to large-cap benchmarks, with price-to-earnings ratios trading at an 11% discount. Earnings growth projections of 15% in 2024 and over 30% annually through 2026 further support the case for outperformance.

Structural shifts such as domestic manufacturing reshoring and infrastructure investments are also bolstering small-cap resilience. Companies with strong ties to U.S. supply chains are poised to capitalize on federal incentives and increased capital expenditures. Additionally, declining interest rates are expected to spur merger and acquisition activity, offering value-creation opportunities for smaller firms in sectors like technology and healthcare.

The strategy of purchasing the top 500 stocks by daily trading volume and holding them for one day delivered a 166.71% return from 2022 to the present, significantly outperforming the benchmark’s 29.18% gain. This underscores the role of liquidity concentration in short-term performance, particularly in volatile markets, though the approach is not suited for long-term investment horizons.