Despite a recent rebound in stocks, the benchmark S&P 500 index in the U.S. is on the cusp of forming an ominous “death cross” technical pattern.
Analysts and chart experts say that the S&P 500 is likely to enter a death cross formation at the close of trading on April 14, its its first such pattern since March 2022 when the U.S. was in a bear market caused by high inflation and rising interest rates used to dampen it.
A death cross occurs when the 50-day moving average of an asset or index dips below its 200-day moving average. Technical analysts typically interpret it as a sign that a correction could be turning into a deeper downturn and possibly even a bear market, defined as a drop of 20% or more from recent highs.
Difficult Outlook
Despite attempts at a recovery, U.S. stocks continue to struggle as uneven tariff policies, escalating trade wars, and economic uncertainty grip markets worldwide. A death cross has already formed for the small-cap Russell 2000 index, as well as for Bitcoin (BTC), the largest cryptocurrency by market capitalization.
History shows that further declines have typically followed past death crosses for the S&P 500 index, which is widely viewed as the benchmark for U.S. equity markets. Many analysts are warning that the death cross could signal that the S&P 500 will retest its 2025 low in coming weeks.
Is the Vanguard S&P 500 ETF a Buy?
The Vanguard S&P 500 ETF (VOO), which tracks the movements of the benchmark U.S. stock index, has a consensus Moderate Buy rating among 506 Wall Street analysts. That rating is based on 412 Buy, 86 Hold, and eight Sell recommendations made in the last three months. The average VOO price target of $621.83 implies 25.79% upside from current levels.
