With the Fed set to announce an interest-rate cut on Wednesday, KeyBanc analysts are questioning whether the REIT rally will continue through an extended cutting cycle and are predicting some near-term volatility.

The U.S. dollar strengthened against most major currencies on Tuesday following better-than-expected retail sales data that seemed to support a less aggressive stance by the Federal Reserve, which is widely expected to deliver its first interest rate cut in more than four years.

U.S. small-cap stocks have staged an epic rally over the past month with the Federal Reserve set to cut interest rates for the first time since 2020 — but uncertainty on the economic and monetary-policy outlook still has investors fretting over whether gains can be sustained in one of the most roughed-up corners of the market.