The small cap-focused $Russell 2000 Index (.RUT.US)$added 1....

The small cap-focused $Russell 2000 Index (.RUT.US)$ added 1.7% in the session. This built on last week’s gain, which was seen as a sign of traders moving money to this cohort from Big Tech names that have seen monster gains this year.

The shift to small caps also comes as investors grow increasingly excited that the Federal Reserve will soon begin lowering interest rates, a move seen as particularly helpful for smaller and more cyclically oriented companies.

Larry Tentarelli, chief technical strategist at the Blue Chip Daily Trend Report, said the rotation from megacap tech to small-cap stocks seen last week is still prevalent. He said Monday’s broad advance is an attempt from investors to get ahead of potentially positive earning reports over the next few days and the personal consumption expenditures price index reading due at the end of the week.

“I do believe this rotation story is still intact,” Tentarelli said. “If we get that bullish inflation report, I think you could see another leg higher in small caps and the banks.”

As corporate earnings season ramps up, investors will keep an eye on releases from well-known companies such as General Motors, Coca-Cola, Comcast, UPS and Spotify due before the bell Tuesday. Technology giants Alphabet and Tesla, as well as toymaker Mattel, are expected to post results after the closing bell.

Traders will also watch Tuesday morning for economic data on nonmanufacturing and existing home sales.