Stocks to buy: These cheap small cap stocks may rebound, per Jefferies – CNBC

In this photo illustration, the Interactive Brokers LLC logo seen displayed on a smartphone.

Igor Golovniov | LightRocket | Getty Images

Small caps have faltered recently amid the rotation back to growth stocks but Jefferies is banking on several smaller names to rebound.

The small-cap benchmark Russell 2000 is off by about 5% since its peak in March, after falling 4.2% just last week.

The flattening of the yield curve — which signals less optimism towards economic growth — has pushed investors out of cyclical names and back into growth stocks.