Stocks hit all-time highs as investors bet on the Federal Reserve cutting rates soon, leading to a surge in riskier assets. Wall Street saw a shift towards small-cap stocks and away from megacaps after soft inflation data. The Russell 2000 outperformed the Nasdaq 100 by 12 percentage points, indicating a broadening market rally. Analysts see potential for earnings growth in lower-quality and cyclical sectors if rates are cut effectively. The S&P 500 and Dow Jones rose, while the Russell 2000 had its best five-day run since 2020. However, the rapid rise in small caps raises concerns of overheating. While the market broadening is positive, caution is advised as some indicators suggest a possible short-term pullback. The S&P 500 has gone over 350 sessions without a 2% decline, signaling a period of sustained market optimism.Overall, the market outlook is optimistic, but potential risks and profit-taking are worth considering in the coming sessions.