VOO is down 7% from its January high. The case for staying put has never been stronger

As of March 30, the Vanguard S&P 500 ETF (NYSEMKT: Flight) It was down 7% from its all-time high. This led to the first significant decline for the S&P 500 in nearly a year.

This type of pullback can be uncomfortable, but it’s not uncommon. A pullback of at least 5% usually occurs on average once a year. In a sense, we are right on schedule. But it’s how investors respond that will be the difference between a temporary road bump and something more damaging.

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Several factors at play make me feel like this is more of an opportunity than a current pullback warning.

• Pullbacks of 5%-10% in the S&P 500 are common and occur once a year.

• S&P 500 earnings are expected to grow 13% year over year in the first quarter of 2026. If it happens, it will be the 6th consecutive quarter of double-digit growth.

• Signs of a near-term resolution to the Iran war could add a bullish catalyst for stocks.

• The S&P 500 is trading at a forward price/earnings (P/E) multiple of 19 for the first time in a year.

While short-term performance and volatility can be driven by any number of factors, long-term performance is usually a product of corporate earnings growth. When earnings rise, stock prices are justified to go higher.

Exactly what we are seeing now. Despite concerns about inflation, the labor market, and economic weakness, S&P 500 earnings are expected to grow 17% in 2026 and another 17% in 2027.

With ratings contracting in the early part of this year, the double-digit earnings growth story provides a powerful backdrop.

The biggest factor triggering stock market volatility this year is war. That has sent oil prices significantly higher, raised inflation expectations, and taken the odds of a Fed rate cut this year almost entirely off the table.

But there are signs that the conflict will come to an end. The stock market has already reacted as if this is likely at this point. If a resolution is reached and the Strait of Hormuz reopens, investors are likely to respond positively.

Data source: Vanguard, as of 3/31/26.