Russell 2000 notches record close for first time since 2021

Sept 18 (Reuters) - The Russell 2000 index notched a record-high close on Thursday for the first time in four years, reflecting growing optimism about small-cap U.S. companies as lower interest rates boost investor confidence.

The index .RUT gained 2.5% for the session to close at 2,467.70, eclipsing its previous all-time high close of 2,442.74 reached in November 2021.

The Russell 2000 is made up of about 2,000 publicly listed companies that are smaller than those included in the S&P 500 .SPX. It has soared about 40% since April 8, the low point of a global selloff fueled by worries about President Donald Trump's sweeping tariffs.

"Small caps have underperformed pretty dramatically over the last decade or so, and catch-up trade seems to be underway. ... We see the environment that we are in being conducive for the rally in small caps to continue," said Keith Buchanan, senior portfolio manager at Globalt Investments.

The index has rebounded, along with the benchmark S&P 500 and the blue-chip Dow Jones Industrial Average .DJI, as a limited effect of tariffs on U.S. inflation and Washington's deals with major trading partners eased investors' worries.

Anticipation ahead of the Federal Reserve's 25-basis-point interest rate cut last Wednesday fueled recent gains in the Russell, along with expectations of additional rate cuts before year-end. Small-cap companies are more reliant than larger corporations on debt financing, and they tend to benefit from low interest rates.

Trump's sweeping tax cut bill, passed by the Senate in July, will also support domestically driven small caps more than multinational corporations, Buchanan also said.

The Russell 2000 index has gained about 11% so far this year, lagging the S&P 500, which has gained about 13%.