Here are 13 reasons why large caps will now beat small caps, according to UBS

UBS strategists say the S&P 500 is poised to outperform the Russell 2000 in the near term, citing 13 drivers that favor large caps. Key market mechanics — positioning (CTAs are max long small- and mid-caps but only ~60% long large caps), mutual-fund lag, passive/factor concentration, stronger earnings quality and heavy AI investment — support a rotation back into bigger stocks. Rising rates, higher leverage and a looming refinancing/maturity wall make small caps more vulnerable, while fading prospects for Fed easing and a negative fiscal impulse in 2027 also weigh on smaller, more cyclical names. The report implies institutional reweighting could accelerate S&P outperformance and reduce small-cap leadership.