Fear Creeps Into Corporate-Bond Market -- WSJ

Dow Jones2025-04-04

By Gunjan Banerji

The tariff-induced anxiety sweeping the stock market is hitting corporate bonds.

Investors are selling the riskiest of these securities, sending yields on junk-rated corporate debt to the highest levels since last summer. The selloff is likely to curb new debt sales by companies with credit ratings that are below investment-grade.

The tariffs threaten to crimp profits at companies doing business across the country, including market giants such as Apple and Amazon. They could be particularly harmful to junk-rated companies, those with the weakest financials.

"For lower-quality companies, this hit may be enough to drive some into bankruptcy," wrote Ben Inker and John Pease at money-manager GMO in a note this week.

They wrote that junk-rated debt looks particularly unappealing right now, since yields have stayed relatively low for much of this year.

This item is part of a Wall Street Journal live coverage event. The full stream can be found by searching P/WSJL (WSJ Live Coverage).

(END) Dow Jones Newswires

April 04, 2025 11:02 ET (15:02 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.

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