Market sentiment is "close to frenzy" and the U.S. small-cap stocks are flashing a red light in terms of their rise.

Wisdom Finance APP learned that signals of overheating in the US stock market have been frequent, indicating that the recent upward trend of some high-risk stocks may come to an end. Over the past month, the S&P 500 index has surged to a historic high, with small-cap stocks performing even more strongly. Small-cap companies typically have higher debt and lower profitability than large-cap companies. However, as investors abandon defensive positions and pour into more speculative areas, small-cap stocks have easily outperformed large-cap stocks. But history has shown that when enthusiasm becomes excessive, it is not a good sign for small-cap stocks.