Small-cap stocks were taking a beating Thursday, Nov. 9, as reality set in that tax reform might not happen until 2019.

The Russell 2000 I:RUT , which tracks small-cap names, dipped 0.54% Thursday afternoon. Small-cap stocks have more to lose should tax reform face significant delays, as they're more likely than larger firms to be based in and contain most of their operations in the U.S. While larger conglomerates can focus outside the U.S. under unfavorable tax legislation, many small caps are unable to follow suit.

A proposed plan from Senate Republicans could push tax reform back to 2019. Earlier expectations of tax legislation before the New Year had sent stocks to new records as investors brimmed with confidence. Thursday's stock performance offered a sharp contrast.

Small cap's tough day comes as the latest hit in a bumpy 2017 for small-cap stocks. Shares of smaller companies have returned around 10% since the start of the year. Their larger cap, blue chip big brothers on the Dow Jones Industrial Average have returned 22% since January.

It's worth watching small-cap stocks, as they're usually the first to run higher in a bull market and the first to signal blood in the water during a bear market.

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