The Russell 2000 is a stock market index that measures the performance of about 2,000 of the smallest publicly traded companies in the US. It is a subset of the broader Russell 3000 Index, which includes the 3,000 largest publicly traded companies in the US. The Russell 2000 is a market-capitalization weighted index, which means that the amount that each company accounts for in the index is determined by the size of the company’s market cap, or the total value of its shares outstanding. The median market cap of a company in the Russell 2000 was about $950 million at the end of 2022. The largest stock by market cap on the index was $12.01 billion.

The Russell 2000 is considered a reasonably accurate barometer of the US economy, particularly as it applies to smaller companies. It is frequently viewed as a bellwether for the economy as the smaller businesses it follows can be the engines of job growth, and tracking them can help economists forecast where the US economy is going. The Russell 2000 is more diversified than other popular indexes such as the S&P 500, as it focuses on smaller companies and contains 2,000 of them.

The Russell 2000 is composed of smaller and more volatile stocks than those in large-cap indexes. However, the large number of companies in the index helps to mitigate the risk since its less reliant on any particular stocks performance. The Russell 2000 is a popular way to invest in small-cap stocks, and investors can invest in it by purchasing shares of each company in the index or by investing in a Russell 2000 exchange-traded fund (ETF) or index fund that seeks to duplicate the performance of the index.