Gold's big rally has sparked a bearish stock-market signal that hasn't been seen in over 20 years

• The S&P 500's relationship to gold is flashing a worrying signal, Stifel strategists said.
• The index's price relative to gold recently fell below its seven-year moving average.
• That hasn't happened since 2002, and has historically been followed by a challenging period for stocks.

The stock market is flashing a rare warning that things could get tough for investors.

That warning has nothing to do with AI. It's the fact that the S&P 500 is now being far outpaced by the price of gold, according to strategists at Stifel.

The investment bank flagged the rapid rise in the precious metal, with bullion already surging more than 20% in 2026, compared to the 1% gain in the S&P 500.

That rally has broken down a long-standing relationship between stocks and gold, the firm said, noting that the price of the S&P 500 relative to gold has fallen below its seven-year moving average.

That's a rare signal for stocks that has typically been followed by "difficult" years for investors, Stifel wrote in a note. Markets have only seen the seven-year moving average broken four times in the past century, with the last signal occurring more than two decades ago, around the time the dot-com bubble popped.

In each instance, stocks have been stuck in a narrow range and struggled to move higher, strategists added.

When the relationship between stocks and gold has broken down to this degree in the past, the economy has typically failed to see a burst of productivity and low-inflation growth in the years that followed, they said.

"The S&P 500 has decisively broken down versus gold," a team led by Stifel's managing director, Barry Bannister, wrote. "Perhaps 'this time is different' and both the S&P 500 and gold will continue to soar, but to us that sounds like wholesale flight from fiat money, which has never ended well in history."

The firm said it believes the S&P 500 would see a consolidation at 7,000, a key psychological threshold the index briefly surpassed for the first time on Wednesday. That ceiling is also supported by Stifel's Equity Risk Premium and the firm's valuation analysis of the benchmark index, strategists added, pointing to prior research it published.

Forecasters on Wall Street are generally expecting another strong year of gains in 2026, but the outlook for stocks has wobbled occasionally as markets have been rattled by geopolitical conflict and fears that the AI trade is becoming unsustainable. Stifel, whose forecasts have leaned more on the bearish side, said it saw as much as 9% upside for the S&P 500 this year, but warned the index could drop as much as 20% if the US enters recession territory.