Small-cap stocks, which tend be “insulated from overseas turmoil” have been performing well against the backdrop of a looming trade war with China. This according to a recent article in The Wall Street Journal.

Since the beginning of the year, the article reports, the S&P Small Cap 600 is up 12.4% (versus 3.5% for the S&P 500) and the Russell 2000 has gained 11.2%. “A rising dollar and concerns about weaker global growth are also driving investors into the relative safety of smaller companies, as measured by market capitalization, that tend to earn most of their money at home.” The article notes, however, that domestically-focused companies with globally exposed suppliers will still be affected by trade disruptions.

While U.S. retail sales and consumer spending have continued to rise, weaker economic data from Europe and China have dampened hopes for synchronized global growth. This suggests “that America’s domestic economy has room to grow.”

After last year’s tax cuts, a May survey of small business profitability reflected its highest reading since 1973 (data from the National Federation of Independent Business). “Views about business expansion were also the most optimistic in the survey’s history,” the article reports.

Related: Emerging Markets in Tough Spot, Says Harvard Professor Reinhart

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