Smaller, speculative companies are in the midst of a furious autumn stock-market rally, but they still have an interest-rate problem.

The S&P 600, an index of small companies with an average market value of $1.8 billion, has climbed 8% from its recent low on Oct. 27, slightly trailing the S&P 500. Yet for 2023, it is on pace to trail its large-cap counterpart by the widest margin in a calendar year since 1998. The S&P 600 is up 0.1%, while the S&P 500 has climbed 17%.