The Russell 2000 index tracks small-cap companies and ended Friday with a five-week losing streak.
Rising Treasury yields drove the decline as investors shifted away from riskier assets.
Small-cap stocks are more sensitive to borrowing costs than larger peers.
Many smaller firms carry higher debt loads and rely on floating-rate loans.
Higher yields increase those interest expenses and pressure profit margins.
The selloff reflects broader concerns about prolonged elevated rates.
Large-cap stocks held up better due to stronger cash positions and global revenue.
