Weekly Market Recap – August 31, 2026

Despite bouts of volatility, markets have been supported by solid economic activity and strong earnings growth throughout 2026. As a result, high yield spreads have narrowed to extremely tight levels, now sitting in the 4th percentile versus history. At the same time, the high yield market has seen a recent uptick in the default rate over the last 12months, currently sitting at 2.0%. While this figure is the highest it’s been since January 2024, looking under the hood shows that these defaults are mainly concentrated in the CCC credit bucket.