Why this matters now?

The recent correction has thrown up an important market signal:
small caps have corrected, but they have not collapsed.

...and that distinction matters.

For a segment often accused of excess and froth, the recent drawdown suggests that valuations have already absorbed a meaningful amount of pessimism.

What the market is signalling?

While sentiment around broader markets has turned cautious, the data suggests that small caps have held up better than expected in the recent phase of correction.

This is not a sign of immunity.
It is a sign that the segment may no longer be as overheated as market perception still assumes.

In other words:
Price correction has done some of the valuation clean-up already.

Why this strengthens the case for allocation/investment?

When an inherently volatile segment stops reacting disproportionately on the downside, it often marks the beginning of a more constructive setup.

That is where small caps appear to be today.