The Brazilian Small Cap Index (SMLL) has jumped more than 4% in the first few days of September, signaling a decisive shift of capital away from defensive sectors and into companies reliant on the domestic economy. The index is recovering ground after posting a 1.26% loss in August, with the swift change in momentum driven by investors pricing in a more aggressive Selic rate-cutting cycle from the Central Bank of Brazil. The move marks a clear change in sentiment toward riskier, high-beta assets that benefit most directly from lower borrowing costs and improving consumer confidence.