U.S. stocks have managed an impressive turnaround since the Iran war trimmed 9% off of the S&P 500 (SNPINDEX: ^GSPC) earlier this year. But since the war isn’t over and oil prices are still over $100 a barrel, it might be giving investors some reason for concern.
While I think that’s fair, there’s one overarching factor that gives me confidence to keep buying: corporate earnings. Since the market’s leadership has spread beyond just megacap tech in 2026, I believe that Vanguard Total Stock Market ETF (NYSEMKT: VTI) is the no-brainer exchange-traded fund (ETF) to buy right now.
|
Will AI create the world’s first trillionaire? Our team just released a report on a little-known company, called an “Indispensable Monopoly,” providing the critical technology Nvidia and Intel both need. |
While there are signs of weakness in the labor market and inflation is rising again, I think the S&P 500 will struggle to fall too far as long as corporate earnings hold up. But they’re doing more than holding up right now. They’re actually strengthening.
Consider the following:
-
S&P 500 earnings are on pace to grow by 15% year over year in Q1 2026. That would mark the sixth consecutive quarter of double-digit year-over-year earnings growth.
-
Current forecasts call for S&P 500 earnings growth of 18% in 2026 and another 16% in 2027. Both years are likely to be led by earnings growth from the tech sector.
-
After years of negative growth, small caps are finally starting to see earnings accelerate. Q4 2026 could see 29% year-over-year earnings growth for the S&P 600 index.
-
The forward 12-month price/earnings (P/E) ratio for the S&P 500 is 20.9 compared to its five-year average of 19.9. Stocks aren’t really that overvalued at current prices.
Considering the earnings backdrop, relative valuation, and the fact that the market has rotated away from tech in 2026, the Vanguard Total Stock Market ETF looks like an easy choice for a $500 investment. This ETF tracks the CRSP US Total Market Index, gaining access to the entire U.S. equity market, including over 3,700 small-, mid-, and large-cap growth and value stocks. Its low expense ratio of 0.03% lets investors keep most of the strong returns.
Should you buy stock in Vanguard Total Stock Market ETF right now?
Before you buy stock in Vanguard Total Stock Market ETF, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vanguard Total Stock Market ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
