Growing optimism over rate cuts following Federal Reserve Chair Jerome Powell's speech at the Jackson Hole Economic Symposium last Friday sent the Russell 2000 (^RUT) small-cap index soaring.

Looking ahead, MDB Capital president and chief market strategist Lou Basenese says small caps have more room to run, as long as the US economy avoids a recession.

"I think it's a risk-on risk-off market. We're getting back to risk-on. I think investors as a whole, on the macro level, have to see that the soft landing is going to materialize. There's been some finicky data that has not been consistent. It's a matter of 'are we going to a recession or just a slowdown?' I'd argue... that we're not anywhere near a recession," Basenese said on Catalysts.

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Nicholas Jacobino