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Weekly Market Summary
Mar 2 to Mar 6, 2026
Extra Credit*
- Loan returns are down 1.08% year to date, marking the weakest start to a year in the past decade and surpassing the 0.77% decline seen in the first two months of 2020 at the onset of the Covid shock. It represents the second-poorest opening to a year since the Global Financial Crisis, trailing only 2016, when returns were negative 1.18% through February.
- The US leveraged loan market headed into the final week of an already turbulent February facing renewed downside pressure. A sharp equity sell-off, fueled by fresh trade policy concerns and growing fears that AI-driven disruption could weigh on the Software sector further eroded risk appetite.
- The Morningstar LSTA US Leveraged Loan Index fell a combined 49bps on Feb. 23–24, marking its steepest two-day decline since April 7 during the Liberation Day volatility. Loans ultimately posted a 0.78% loss for February, the weakest monthly performance since September 2022, following a 0.31% decline in January.
- When excluding Software, which represents 13% of the loans outstanding in the index, the broader loan market has held up considerably better. In February, the weighted average bid on performing loans outside the sector slipped 75bps to 96.12, while Software loans declined much more sharply, falling 392bps to 87.64. Since the end of 2025, performing Software loans have dropped 756bps, versus a far smaller 124bps decline for the rest of the index.
Morningstar as of 3/4/2026.
Previous reports
*Source: Morningstar®, Bloomberg, Credit Suisse. OAS is Options Adjusted Spread. 4-year discount margin is used for spread for bank loans. Yield quoted is yield-to-worst or equivalent calculation. YTD Low / High for yields are based on end of week and not intraday movements. Indexes and sub-indexes: Investment-grade corporates represented by Bloomberg US Corporate Bond Index. High-yield bonds represented by Bloomberg US Corporate High Yield Index. Bank loans represented by Credit Suisse Leverage Loan Index. The red and green arrows depicted under Yields, Option Adjusted Spreads, and Prices indicate a higher or lower value from the previous week.
Past performance does not guarantee future results. Index performance is not indicative of fund performance. Indexes are unmanaged and it is not possible to invest directly in an index.
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