S&P 500 Flashes Bearish Signal
S&P 500 Flashes First ‘Death Cross’ Since 2022, But Signals Remain Unclear
The S&P 500 reached a key technical milestone on Monday, marking its first “death cross” since March 2022 — even as the broader market extended gains from last week’s rebound.
A death cross occurs when the 50-day moving average falls below the 200-day moving average, often interpreted as a sign that short-term momentum is weakening and a deeper downturn may be forming.
This latest signal reflects broader market turbulence in 2025. The Russell 2000 and Tesla Inc. have already triggered similar patterns, reinforcing concerns about market breadth and investor sentiment.
However, history suggests the impact of a death cross isn’t always bearish. According to Dow Jones Market Data, the S&P 500 has typically moved higher three, six, and twelve months after previous death crosses — suggesting short-term volatility doesn’t always lead to prolonged declines.
Paul Ciana, chief technical strategist at BofA Securities, advises watching whether the 200-day average has fallen over the past five sessions. If so, it may indicate further downside and a potential retest of the recent 2025 low.
Others, like Craig Johnson of Piper Sandler, argue that death crosses are lagging indicators. In many cases, they signal that most of the damage has already been done and that a rally may be near.
Indeed, recent history paints a mixed picture: the S&P 500 was down a year after the March 2022 death cross, but surged 50% following the same signal in March 2020.
For now, markets remain resilient. On Monday, the S&P 500 gained 0.8%, while the Nasdaq Composite and Dow Jones Industrial Average also closed in the green.
