After getting smacked for much of 2014, small-cap stocks snapped back in mid-October. The $27.4 billion iShares Russell 2000 (IWM) — the largest small-cap ETF — finished October up 6.6%. It’s now 2% off its old high, set on July 1. Large-cap iShares Russell 1000 (IWB) rose 2.39% last month. But the small-cap rally has brought an uptick in valuations. And small caps are arguably one of the most overvalued sectors of the U.S.