Russell 2000 Weekly Market Insights - Week of September 7th

# Weekly Market Analysis: Russell 2000 Outlook for the Week of September 7, 2025

Welcome back to the Hobbs Trades weekly newsletter! As your go-to market analyst here at [www.hobbstrades.com](http://www.hobbstrades.com), I'm diving into the Russell 2000 small-cap index as we head into the trading week starting September 8, 2025. Following a full five-day session after Labor Day, key inflation data looms large, potentially influencing small-cap trajectories amid ongoing valuation appeal and sector rotations. The Russell 2000 closed the prior week with gains, reflecting resilience despite broader market volatility from employment figures. Let's break it down.

## Recent Performance Recap

The Russell 2000 index wrapped up the week ending September 5 on a positive note, closing at 2,393.50, up from the prior week's 2,366.42. This represents a weekly gain of approximately 0.66%, contributing to a year-to-date advance of 7.03%. Small caps outperformed in August, surging 7.14%, more than double the S&P 500's return, driven by renewed interest in undervalued sectors.

Monthly trends show continued momentum from July's rebound, with the index benefiting from a shift away from mega-cap tech amid rate cut expectations. Valuations remain compelling, trading at a 21-26% discount to the S&P 500, positioning small caps for potential outperformance if economic conditions favor broader growth. Recent X discussions highlight bullish setups, with traders targeting wave 5 diagonals and eyeing breakouts as risk-on sentiment aligns with altcoin correlations and historical patterns.

## Key Price Levels for Russell 2000 Futures (RTY)

RTY futures are consolidating near recent highs, with the September contract closing at 2,393.50. Monitor these technical levels for directional signals:

- **Support Levels**:

- Immediate: 2,368 (pivot low confluence).

- Next: 2,350-2,370 (recent swing lows and RSI supports).

- Deeper: 2,300 (psychological level and potential retracement on soft data).

- **Resistance Levels**:

- Immediate: 2,416 (short-term overhead).

- Next: 2,436 (14-day RSI at 70%).

- Major: 2,525 (52-week high).

A push above 2,416 could accelerate upside, particularly on favorable inflation reads, while a breach below 2,368 might invite selling toward deeper supports.

## IWM ETF Options Chain Insights

The iShares Russell 2000 ETF (IWM) options reflect cautious optimism, with activity centered around at-the-money strikes for the nearest weekly expiration (September 8, 2025). IWM closed at 237.77 on September 5.

- **High Open Interest Calls** (Bullish Focus):

- Strike 236: 1,576 OI, volume 4,777, last price $2.24, IV 14.04%.

- Strike 237: 2,602 OI, volume 9,963, last price $1.51, IV 13.09%.

- Strike 238: 2,475 OI, volume 10,487, last price $0.94, IV 12.57%.

- Strike 240: 6,872 OI, volume 13,860, last price $0.25, IV 11.48%.

- **High Open Interest Puts** (Defensive Focus):

- Strike 227: 1,171 OI, volume 713, last price $0.02, IV 22.66%.

- Strike 228: 840 OI, volume 726, last price $0.02, IV 22.07%.

- Strike 230: 1,101 OI, volume 2,167, last price $0.03, IV 17.97%.

- Strike 231: 2,910 OI, volume 3,186, last price $0.04, IV 16.80%.

Implied volatility (IV) ranges from 11-14% for ATM strikes, with a put skew showing higher IV on OTM downside (up to 50%+), indicating hedging against potential pullbacks. Volume spikes in near-ATM calls suggest upside positioning, while put activity points to protection around 227-231. No extreme skew, but the setup favors mild moves unless data surprises.

## Economic Events to Watch This Week

This week's focus shifts to inflation metrics, which could impact small caps given their sensitivity to interest rates and domestic growth. Key highlights:

- **Monday, September 8**: No major releases.

- **Tuesday, September 9**: NFIB Small Business Optimism (10:00 ET).

- **Wednesday, September 10**: CPI (8:30 ET), expected at 2.9% YoY; Core CPI (0.3% MoM).

- **Thursday, September 11**: PPI (8:30 ET), Jobless Claims (8:30 ET).

- **Friday, September 12**: Consumer Sentiment (10:00 ET).

U.S. data dominates, with CPI as the highlight—cooler prints could bolster rate cut bets and small-cap rallies.

## Outlook for the Week

Short-term volatility may arise from inflation data, but the Russell 2000's attractive discount and historical rebound patterns position it for 2025 gains, potentially 16-18% or more if EPS surges align with forecasts. Bullish above 2,368 with breaks toward 2,436; bearish below on hot CPI. Options indicate hedged bets for contained volatility, but surprises could spark moves.

*Data as of September 6, 2025. Not financial advice—always do your own research.*