The Vanguard S&P 500 ETF (VOO) stock has pulled back in the past seven consecutive days and is hovering at its lowest level since June 11. There is a risk that the recent stock market rally is about to take a breather. 

S&P 500 Index has fallen despite some major good news

The S&P 500 Index and its top ETFs, like VOO and SPY have pulled back despite some good news, including the recent US-Iran deal that has pushed crude oil pricesmuch lower than where they were a few months ago. Brent has dropped to $70, while the West Texas Intermediate (WTI) has moved to $69.

The falling oil prices are beneficial to the stock market because of its impact on consumer and producer inflation. Data released on Thursday showed that the headline PCE rose from 3.8% to 4.1% in May, moving higher than the 2% target. 

As such, with energy, metals, and fertilizer prices falling, there is hope that inflation will drop. This explains why the odds of the Federal Reserve hiking interest rates this year have dropped substantially in the past few days.

There are signs that corporate earnings are gaining momentum. A report released this week showed that Micron’s revenue jumped by over 300% in the last quarter, and the management believes it has more gains to go. 

Data compiled by FactSet shows that the average earnings growth for the second quarter is 22%. Historically, the real number is usually much higher than the estimates. For example, the estimate for the first quarter was 12%, and the real figure came out at 28%, the highest level in years.

Additionally, there are signs that the index is highly undervalued, with the forward price-to-earnings ratio being 22. While this is higher than the five-year average of 19, the index is seeing stronger revenue growth than it had in this period.

Potential risks may drag the VOO ETF stock in the near term

There is a risk that the S&P 500 Index will retreat in the coming weeks. One of the risks is that the current gains are being led by the memory industry. Sandisk stock has jumped by 855% this year, while Micron, Western Digital, and Seagate have soared by over 263%. 

The other top gainers this year are companies like Intel, Marvell, Dell, Corning, Applied Materials, and AMD. All these stocks have jumped because of the role in the artificial intelligence (AI) industry. They are all suppliers to hyperscalers like Microsoft, Meta Platforms, and Google.

The risk is that these companies will reverse if demand from hyperscalers starts falling. This is a possible thing since most of them have plunged in the past few weeks. Microsoft stock has dropped by 36% from its highest point in July last year, while Amazon has fallen by 18%. Google has fallen by over 15% from the year-to-date high.

VOO stock price technical analysis

Vanguard S&P 500 ETF | Source: TradingView

Technicals suggest that the VOO stock price may drop further in the near term. It has dropped below the 25-day Exponential Moving Average (EMA). 

A closer look shows that the fund formed a double-top pattern, a common bearish reversal sign. Also, it has formed a bearish divergence pattern as the Relative Strength Index (RSI) and the MACD have continued falling.

Therefore, the stock will likely continue falling as sellers target the 100-day moving average of $655. This retreat will likely happen before the earnings season starts and will be followed by more gains.

The post VOO stock: Here’s why the S&P 500 Index could be on the verge of a reversal appeared first on Invezz

US stocks opened lower on Friday as investors continued to rotate out of technology stocks, with chipmakers facing renewed selling pressure despite strong recent earnings and upbeat demand forecasts.

The Dow Jones Industrial Average was down 207 points points while the Nasdaq Composite dropped 0.95%. The S&P 500 declined 0.61%.

The latest weakness comes after a strong quarter for semiconductor stocks, as investors increasingly question lofty valuations and the sustainability of heavy spending on artificial intelligence infrastructure.

Chip stocks slide despite strong earnings

Semiconductor stocks led the premarket declines. Shares of Micron Technology fell more than 5.8% after soaring over 15% in the previous session following better-than-expected quarterly results and forecasts.

Advanced Micro Devices and Intel each declined more than 3.5%, while Nvidia lost about 1.7%. Oracle also dropped 0.38%.

The selloff reflects growing investor concerns about who ultimately bears the costs associated with massive investments in artificial intelligence infrastructure.

A New York Times report that OpenAI is considering delaying its initial public offering until next year also weighed on sentiment.

The report raised concerns about “sustainability of their infrastructure spending given the delay in funding from the capital markets,” wrote JPMorgan traders in a note.

Technology shares had already come under pressure in Thursday’s session.

Apple plunged 6% after announcing price increases for iPads and MacBooks due to rising memory and storage costs. Microsoft also declined after raising prices on its Xbox gaming consoles.

Apple recovered modestly on Friday, rising about 0.7%.

Inflation concerns and rate fears add pressure

The market’s concerns extend beyond technology spending. Fresh inflation data and changing expectations for Federal Reserve policy have also weighed on sentiment.

Data released on Thursday showed US inflation climbed above 4% in May for the first time in three years, driven by higher energy prices linked to tensions in the Middle East.

Although oil prices have recently retreated as geopolitical tensions eased, investors remain concerned that higher semiconductor costs could once again fuel broader inflationary pressures.

Interest rate concerns remain elevated, with traders pricing in one 25-basis-point rate increase and a nearly 27% chance of another hike before year-end, according to LSEG data.

Global technology selloff spreads across markets

The weakness in technology stocks extended beyond the United States.

SoftBank Group, a major backer of OpenAI, plunged more than 12% in Asia.

South Korea’s Kospi dropped 5.81%, while Japan’s Nikkei 225 declined 4.15%. Hong Kong’s Hang Seng Index and China’s CSI 300 also posted losses.

European stocks moved lower as well, with the pan-European Stoxx 600 falling 1%.

Among individual movers, Synaptics fell 0.95% after ON Semiconductor agreed to acquire the company in an all-stock deal valued at about $7 billion. Shares of ON Semiconductor fell 19.42%.

Investors are also preparing for heavy trading activity tied to Russell index changes, including the reclassification of several megacap stocks and the fast-track addition of SpaceX to the Russell 1000.

The post Dow falls 200 points as tech selloff deepens and chip stocks extend retreat appeared first on Invezz

Micron Technology’s MU shares fell sharply on Friday, giving up part of the gains recorded earlier in the week despite the memory chipmaker reporting stronger-than-expected quarterly results.

The stock declined nearly 5% in premarket trading as weakness spread across the broader semiconductor sector.

Other US chipmakers also traded lower, with Intel down just over 3%, Sandisk falling 5%, Arm shedding 4%, and Marvell declining 3.7%.

The decline came as investors remained cautious about the rising costs associated with artificial intelligence infrastructure, triggering a broader sell-off across global semiconductor stocks.

Semiconductor stocks under pressure worldwide

The weakness extended beyond the United States.

In Europe, ASML fell 2.2%, Infineon declined 3.7%, ASM International lost 2.8%, ST Microelectronics dropped 3.3%, and Be Semiconductor slipped 2%.

In Asia, Japanese conglomerate SoftBank led regional losses, plunging more than 12%.

The broader pullback followed a strong rally in AI-related semiconductor companies, even as Micron delivered robust financial results and issued an optimistic outlook.

Revenue beats expectations

MU reported third-quarter revenue of $41.46 billion, compared with $9.3 billion in the same period a year earlier.

The result exceeded analysts’ expectations.

Adjusted earnings reached $25.11 per share on revenue of $41.5 billion, representing a 346% year-on-year increase.

Adjusted gross margin stood at 85%, while adjusted operating margin reached 81%.

The company also projected revenue of around $50 billion for the current quarter, compared with $11.3 billion in the corresponding period last year.

Micron also said customers had committed $22 billion to secure future memory chip supply.

Following the earnings announcement on Wednesday, Micron’s shares surged more than 15% in a single session.

The stock has gained approximately 863% over the past year.

Micron overtakes Meta briefly in market capitalisation

The rally briefly pushed Micron ahead of Meta Platforms and close to Tesla in terms of market capitalisation on Thursday.

Micron’s market value had peaked at $1.398 trillion on Thursday’s session compared with Meta Platforms at $1.392 trillion.

Tesla stood at around $1.4 trillion.

Micron currently has a market capitalisation of $1.37 trillion.

The company first crossed the $1 trillion market valuation mark on May 26, joining a group of semiconductor companies benefiting from investor enthusiasm surrounding artificial intelligence infrastructure.

Micron said second-quarter revenue quadrupled as demand for memory chips continued to outpace supply.

The company described the market as being supported by a demand-driven chip shortage that it expects to continue beyond 2027, marking a change from earlier expectations that supply constraints would ease sooner.

Micron now has 16 long-term chip supply agreements in place.

Growth was primarily driven by the company’s two data-centre business segments, which together generated $25 billion in revenue, up 415% from a year earlier.

The post Micron shares fall after AI-fuelled rally despite blowout earnings appeared first on Invezz

Alphabet shares GOOG rose 1.8% on Wednesday after S&P Dow Jones Indices announced that the Google parent will replace Verizon Communications in the Dow Jones Industrial Average (DJIA) ahead of the opening of trading on June 29.

The move will also result in changes to the S&P 500, with Honeywell Aerospace set to replace Conagra Brands on the same date.

The update marks one of the most significant changes to the 30-stock Dow in recent years and increases the index’s exposure to large-cap technology companies.

Following the adjustment, five of the so-called Magnificent 7 companies will now be included in the benchmark.

S&P Dow Jones Indices said Verizon’s low share price meant it had an “immaterial impact” on the price-weighted index.

Alphabet, by contrast, has a stock price of around $350 compared with Verizon’s roughly $47, making it more influential in a price-weighted structure such as the Dow.

Tech representation in the Dow expands with Alphabet inclusion

The Dow Jones Industrial Average is a price-weighted index, meaning companies with higher share prices carry greater influence regardless of market capitalization.

As a result, Alphabet is expected to account for approximately 4.0% of the index based on Tuesday’s closing price, making it the seventh-largest component.

S&P Dow Jones Indices said in a press release that “Alphabet’s diversified technology and digital services portfolio spans advertising, cloud infrastructure, artificial intelligence, hardware, autonomous mobility, healthcare technology, and media distribution.”

It added: “Adding Alphabet will broaden and strengthen the DJIA’s exposure to these dynamic areas of the US economy.”

Both Alphabet and Verizon are classified as communications stocks by S&P Dow Jones.

The inclusion also reflects a broader shift in the Dow’s composition over recent years.

Nvidia and Sherwin-Williams were added to the index in November 2024, replacing Dow Inc. and Intel.

After the latest change, most major technology companies—including Alphabet, Microsoft, Apple, Amazon.com and Nvidia—will be represented in the Dow.

Honeywell International will remain in the index following the spinoff of Honeywell Aerospace.

Limited short-term impact expected on Alphabet stock

Despite the announcement, Alphabet’s share price reaction is expected to be limited.

The stock has fallen about 11% over the past month amid investor concerns about its artificial intelligence strategy and heavy spending.

Market history suggests index additions to the Dow do not typically generate sustained share price gains.

Because the Dow is not widely tracked by passive funds in the same way as the S&P 500, there is little forced buying pressure when companies are added or removed.

When Nvidia and Amazon.com joined the Dow in 2024, both stocks saw muted immediate reactions, with Nvidia falling 0.8% and Amazon slipping 0.1% on the day of inclusion, according to Dow Jones Market Data.

While the direct impact on Alphabet shares may be limited, the inclusion underscores the increasing dominance of large technology companies in major US equity indices and the continued rebalancing of traditional benchmarks toward the tech sector.

The post Alphabet stock gains after Dow Jones inclusion announcement appeared first on Invezz

Sunrun shares RUN surged 27% in early trading on Wednesday after the residential solar company unveiled a partnership with Tesla and home-energy management platform Renew Home.

The partnership aims to supply electricity capacity to data centers and utilities grappling with soaring demand from artificial intelligence.

The three companies said they would work together to deliver more than 16 gigawatts of flexible energy capacity by creating what they described as the largest distributed power plant in the United States.

The network will draw power from Sunrun and Tesla home battery systems and use more than 8 million smart thermostats and connected devices managed by Renew Home to shift electricity demand and dispatch power during periods of peak grid stress.

AI boom drives electricity demand

The agreement comes as the rapid expansion of artificial intelligence infrastructure places increasing pressure on US electricity networks.

According to Goldman Sachs Commodities Research, data center power demand in the United States is expected to reach 41 gigawatts in 2026 and climb to 66 gigawatts in 2027.

The bank estimates total US data center capacity could approach 95 gigawatts by the end of next year.

The companies said their approach could help support hyperscale data centers without requiring costly investments in new power infrastructure.

“The grid of the 1800s cannot power the innovation of 2026,” Sunrun Chief Executive Mary Powell said.

“Americans deserve innovation that does not create unnecessary energy costs. When data centers are asked to throttle down operations during the most expensive and stressful hours of the day, we can activate our distributed power plants to help provide them the power they need while also protecting American families from footing the bill for costly new infrastructure.”

The partnership already has more than 300 megawatts of capacity available for deployment in Virginia, one of the world’s largest data center markets.

The companies expect that figure to exceed 500 megawatts by 2030 as installations of home batteries and smart devices accelerate.

Distributed energy gains investor attention

The alliance also highlights growing interest in using distributed energy resources to manage rising electricity demand.

Analysis by economic consultancy Brattle Group suggests that better utilization of existing grid infrastructure could lower electricity bills by between $110 billion and $170 billion over the next decade.

Wednesday’s rally put Sunrun on course to erase much of its decline for the year.

The stock had fallen about 30% through Tuesday’s close after the company issued cautious guidance.

The stock was recently trading around $16.24.

Last month, UBS lowered its price target on Sunrun to $20 from $23 while maintaining a Buy rating.

The brokerage reduced its forecasts for solar capacity deployment and now expects Sunrun to deploy 891 megawatts in 2026, down from its previous estimate of 935 megawatts.

Despite trimming projections, UBS maintained its positive stance on the stock, noting that Sunrun and the residential solar sector continue to represent a relatively high-risk, high-reward investment opportunity.

The post Sunrun stock surges on Tesla and Renew Home partnership to power data centers appeared first on Invezz

Rheinmetall AG (RHM) shares are slipping on Wednesday – heading toward one of their sharpest single-day declines ever – due to a major blow to the company’s naval defense pipeline.

On Jun. 24, the German Defense Ministry said it is cancelling the “multi-billion-euro” F126 frigate program, which was slated to be the largest naval procurement project for the German Navy since World War II.

Including today’s crash, Rheinmetall stock is down more than 50% versus its year-to-date high.

Here’s why Rheinmetall stock tanked today

Rheinmetall was positioned to take over as the prime contractor for the F126 frigate program.

Management had actively targeted this contract for completion in Q2, expecting it to bring in €12 billion (at least) in order intake.

Analysts from Morgan Stanley estimate the sudden cancellation would force RHM stock to absorb about €2 billion in write-downs.

This is largely due to its recent €1.5 billion buyout of the Naval Vessels Lürssen (NVL) shipyard, a strategic move specifically designed to anchor its execution of the F126 project.

The Defense Ministry cited severe software delays, persistent friction, and projected cost overruns that would have driven the final bill past €18 billion if they continued with the program.

TKMS shares are defying the defense sector sell-off

Instead of continuing with the F126 “super-frigates,” Berlin has pivoted entirely.

On Wednesday, the German government announced plans to purchase eight smaller Meko A-200 frigates from Rheinmetall’s direct competitor, TKMS AG.

While Rheinmetall shares cratered, TSMS stock was seen trading up as much as 14% on Jun. 24, mostly because Berlin pay roughly €6.3 billion for the first four TKMS vessels, with an option for four more at €5.3 billion.

This massive divergence highlights a swift reallocation of capital across EU defense portfolios, as investors aggressively price in the long-term cash flow injection from the revised naval strategy, immediately transforming TKMS into Germany’s premier maritime contractor.

Wall Street remains bullish on RHM shares

The German Defense Ministry’s announcement has exposed a deeper anxiety across the entire EU defense sector, pulling down peers like Hensoldt, Renk, and Saab.

Investors are beginning to realize that aggressive government defense budgets do not automatically translate into locked-in revenues for specific land defense contractors.

Moreover, capital flows are facing fragmentation as Franco-German tank maker KNDS announced plans today for a dual Frankfurt-Paris IPO, creating a new alternative for defense sector investment.

This sudden contract loss exacerbates a tough year for RHM shares, featuring lacklustre revenue conversions and an investor rotation into drone and air defense-focused manufacturers.

Still, Wall Street analysts remain convinced that Rheinmetall AG will recover in the back of 2026, given the consensus rating on the automotive and arms manufacturer sits at “Buy” currently, according to The Wall Street Journal.

The post Rheinmetall stock: why Germany just dealt a major blow to its biggest defense firm appeared first on Invezz