The S&P 500 and Nasdaq 100 have triggered a rare “death cross” signal, indicating that the current bull market may be nearing its end. The chart pattern occurs when the 50-day moving average falls below the 200-day moving average, signaling potential declines ahead.
Historically, this formation has preceded major downturns, but it’s not a guarantee of an immediate sell-off. In recent years, both indices have flashed this signal without leading to significant losses. The S&P 500 and Nasdaq 100 both displayed the “death cross” on Monday, with the 50-day moving average falling below the 200-day moving average.
This development comes amidst heightened volatility in the markets, which has seen the S&P 500 drop 11% over two days and flirt with bear market territory before recovering. The recent price action saw the 50-day moving average fall to 5,747, just below the 200-day moving average of 5,753.
The Nasdaq 100 also triggered a “death cross” signal on Monday, with its 50-day moving average falling to 20,214, slightly below the 200-day moving average of 20,253. For both indices, this marks the first time since March 2022 that the “death cross” has been seen.
While some investors may be cautious about the signal, it’s essential to note that there have been past instances of head fakes – where the market rebounds and resumes its uptrend – which could suggest a potential buy signal. The most recent “golden cross” buy signal occurred in March 2020, and experts like Katie Stockton of Fairlead Strategies expect a short-term rebound amid tariff uncertainty.
However, other notable death crosses have flashed across markets recently, including bitcoin and Nvidia. Bitcoin has gained roughly 1% since the signal, while Nvidia is down 7%. Ultimately, the market’s reaction will depend on various factors, but this “death cross” signal should not be taken as a definitive warning of an impending decline.
Source: https://www.businessinsider.com/death-cross-pattern-spx-ndx-stock-market-outlook-bearish-signal-2025-4