Small Caps: The Hype If you follow the markets, it is difficult to escape the never-ending cries about the impending gloom and doom in the S&P 500 (SPY) because small cap (IWM) stocks have been lagging large cap stocks. Below are two examples. From The Dallas Morning News : Are small cap stocks waving a warning flag? One of the key signs of a bull market about to roll over is when just a few big stocks are pushing the indexes higher as the riskier, more volatile small caps sell off.