After a significant rebound in tech stocks over the last month and a half, the S&P 500 (^GSPC 0.16%) has mirrored this shift in its performance.
By March 30, the index had dropped over 7% since the year’s start. Fast forward to May 11, and it has surged more than 8% in the same period. It seems that initial worries stemming from the conflict in Iran are easing, alongside a noted improvement in the fundamentals of many companies. While the current rise in stock prices might be slowing down, there are still various factors that could push further record highs. The Vanguard S&P 500 ETF (VOO 0.11%) continues to maintain a positive outlook.
Key Highlights
- S&P 500 revenue is projected to see a 27% year-over-year increase in Q1 2026, with an overall growth expectation of 11%.
- Approximately 84% of S&P 500 companies exceeded earnings estimates, marking the highest achievement in nearly five years.
- VOO’s forward price/earnings ratio (PER) has reached 19.6 times, the lowest since November 2023.
- The blend of strong fundamentals and attractive valuations positions the Vanguard S&P 500 ETF as a worthwhile investment.
Strong Earnings and Ratings
The S&P 500 seems set for its fourth consecutive year of double-digit returns, with the market conditions fostering an environment for rising prices.
Initially, year-over-year earnings growth for the S&P 500 index was anticipated to be positive in the first quarter; however, results have exceeded expectations, and currently, the index is tracking for a remarkable 27% year-over-year growth. This is now the sixth quarter in a row that has seen double-digit year-over-year gains.
Interestingly, while corporate profits have been robust, valuations haven’t escalated dramatically. The S&P 500’s forward price/earnings ratio (P/E) has actually been on a decline throughout 2026, resting at 19.6, the lowest point since 2021. It’s crucial to note that this recent rally is fueled by earnings growth rather than expanding valuations, which is a promising sign for sustaining this upward trend.
VOO: Performance and Key Metrics
| Metric | VOO |
|---|---|
| Price (as of May 11, 2026) | ~$680 |
| Expense Ratio | 0.03% |
| Assets Under Management | $947 billion |
| 1 Year Return | 32.1% |
| 3 Year Annual Return | 23% |
| 5 Year Annual Return | 13.4% |
| Dividend Yield | 1.1% |
The Vanguard S&P 500 ETF stands out as a prime investment choice for those looking to engage with the index.
With an expense ratio of just 0.03%, owning it is quite affordable for investors. Given its vast asset base of nearly $950 billion, liquidity is strong with minimal trading spreads. While the 1.1% dividend yield might not excite all income-focused investors, the substantial tech allocation and growth through AI offer a strong catalyst for continued gains.
For nearly any investor with a timeline of five years or more, the Vanguard S&P 500 ETF is likely a solid addition to their portfolio.
