A key technical signal for the US stock market looks set to go risk-off in the days ahead, based on the S&P 500’s 50-day vs. 200-day averages. Short of a strong rally in the immediate future, the so-called death cross may be near, which some traders will view as a bearish signal for the market’s outlook. Although the signal’s history is far from perfect for market timing, it’s widely followed and so a risk-off switch will likely be seen as a new factor tipping the odds in favor of a bear-market forecast.
Consumer inflation in the US eased in March, slipping to a 2.4% year-over-year pace, which is close to the Federal Reserve’s 2% target. Softer energy prices were a key factor. “Today’s softer than expected CPI release feels backward looking given the large changes to trade policy seen in recent days,” said Kay Haigh, global co-head of fixed income and liquidity solutions at Goldman Sachs Asset Management. “Going forward the Fed is likely to face a difficult trade-off as tariff driven price increases start to feed through to the inflation data and activity remains soft.”
US jobless claims rose slightly last week but remain low relative to the historical record. New filings for unemployment benefits edged up 223,000 for the week ending April 5, less than the 225,000 that analysts had forecast.
The US budget deficit has grown to the second-highest six-month gap on record, according to Treasury Department data. The red ink deepened to more than $1.3 trillion in the first half of the 2025 fiscal year.
Gold rose above $3,200 an ounce for the first time in early trading on Friday. “Recession risks are mounting, bond yields are soaring, and the US dollar continues to weaken – all factors reinforcing gold’s role as a crisis hedge and inflation shield,” said Alexander Zumpfe, a precious metals trader at Heraeus Metals Germany.
The US stock market’s implied recession nowcast indicates a higher risk lately, but has yet to go all-in on assuming the worst, according to a note by TMC Research, a unit of The Milwaukee Company, a wealth manager. The analysis reviewed several variations for modeling the market, including a technique that uses one-year changes for the S&P 500 via the average of monthly prices, as shown below.
