VOO Drops Seven Days; S&P 500 Faces Pullback Risk

The Vanguard S&P 500 ETF (VOO) has declined for seven consecutive trading days, settling at its lowest level since June 11. Market technicians point to chart patterns and momentum indicators as signs of near-term weakness in the S&P 500.

Oil prices eased after a recent U.S.-Iran agreement, with West Texas Intermediate near $69 and Brent near $70. Lower energy prices reduce cost pressure for consumers and producers. At the same time, the headline personal consumption expenditures price index rose to 4.1% in May from 3.8% in April, remaining above the Federal Reserve’s 2% objective. Market-implied odds of an interest-rate increase this year have fallen in recent days.

Corporate reports show pockets of strong growth in the technology supply chain. Memory-chip maker Micron posted revenue growth of more than 300% in its most recent quarter and indicated expectations for further gains. FactSet data estimate average second-quarter earnings growth for the S&P 500 at about 22%. For the first quarter, consensus estimates of roughly 12% were followed by actual reported earnings growth near 28%.

Valuation measures are mixed. The S&P 500’s forward price-to-earnings ratio sits near 22, above the five-year average of about 19, while the index is recording stronger revenue growth than during that five-year span.

Market gains this year have been concentrated in a small group of suppliers to large cloud customers. Sandisk has climbed roughly 855% year-to-date. Micron, Western Digital and Seagate have each risen by more than 263%. Other notable winners tied to artificial-intelligence infrastructure spending include Intel, Marvell, Dell, Corning, Applied Materials and AMD.

Concentration in a handful of names increases the potential for broader index volatility if demand from major cloud providers eases. Large-cap technology stocks have retraced from recent highs: Microsoft is about 36% below its July peak last year, Amazon roughly 18% below recent highs, and Google more than 15% below its year-to-date top.

Technical indicators for VOO show the ETF below its 25-day exponential moving average and forming a double-top pattern. Relative Strength Index readings and the MACD histogram have declined, creating bearish divergences. Short-term sellers are watching the 100-day moving average near $655 as a potential support level; a break below that mark is commonly treated by traders as a signal of a deeper pullback.

Some market participants expect a pause or a pullback ahead of the next earnings season. Others note that stronger second-quarter results and easing commodity pressures could affect investors’ assessments once companies report. The current data and price action leave market participants monitoring earnings, macro readings and technical levels for the next directional cues.