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Investors are souring on America’s riskiest corporate borrowers as fears deepen that Donald Trump’s aggressive trade agenda is slowing growth in the world’s largest economy.
The gap in borrowing costs between junk-rated companies and the US government has jumped by 0.56 percentage points since the middle of February to a six-month high of 3.22 percentage points, according to a closely watched index collated by Intercontinental Exchange.
The pressure on the junk bond market comes as Trump’s chaotic rollout of tariffs on the US’s biggest trading partners has alarmed businesses and rattled stocks.
The reversal in investor sentiment follows a prolonged rally in the riskiest part of the corporate bond market fuelled by a buoyant US economy and record highs for stocks.
“Credit spreads have widened over the…
