The S&P 500 Index gained more than 10% in April, recovering its March decline and setting a new high. Nine of eleven sectors traded higher as stocks recovered from the March selloff, but eight sectors underperformed the index as mega-cap stocks represented a majority of the gains. Bonds traded lower in April as Treasury yields increased. However, corporate bonds outperformed Treasury bonds as credit spreads tightened.
Market Commentary 9/25/25
Fed Rate Cut and Historic Tightness in Credit Spreads
Last week’s Federal Reserve rate cut was widely anticipated, but the market reaction underscored just how unusual today’s credit environment has become.
Corporate credit spreads, already compressed by historical standards, tightened further, underscoring investor appetite for corporate bonds even as Treasury yields remain elevated.
Credit Spreads at Multi-Decade Lows
Corporate borrowers are paying risk premiums not seen in decades. Investment-grade spreads have fallen to 0.77%, a level last observed in 1998 and far below the long-run average of roughly 1.30%. Additionally, high-yield spreads, at 2.79%, are similarly depressed, marking their tightest level since 2007 and sitting well below the median of 4.59% since 1996.
This divergence highlights the unusual dynamic of today’s market: investors are willing to accept historically low compensation for corporate risk even as concerns about U.S. fiscal sustainability keep Treasury yields elevated. In effect, corporations are viewed as safer bets than the sovereign balance sheet they borrow against.
Want to read more? Click below to download our entire market commentary…
Investment products and services are offered through Wells Fargo Advisors Financial Network, LLC (WFAFN), Member SIPC. Oxford Harriman & Company is a separate entity from WFAFN. PM-03232027-8417473.1.1
Related Posts
Market Commentary 5/05/2026
The S&P 500 Index gained more than 10% in April, recovering its March decline and setting a new high. Nine of eleven sectors traded higher as stocks recovered from the March selloff, but eight sectors underperformed the index as mega-cap stocks represented a majority of the gains. Bonds traded lower in April as Treasury yields increased. However, corporate bonds outperformed Treasury bonds as credit spreads tightened.
Bill Bolas Named to Forbes Best-In-State Wealth Advisors List for Second Consecutive Year in the Ohio – Cleveland Region for 2026
William K. Bolas, Senior Managing Director & Partner at Oxford Harriman & Company, has been named to the Forbes Best-In-State Wealth Advisors list for 2025 and 2026, in the Ohio – Cleveland region. This marks the second consecutive year Bolas has received this distinction.