Junk bonds have seen a dramatic $11bn outflow this year as investors flee to safer assets amid geopolitical and technological risks. JPMorgan data reveals a 20-fold surge in weekly withdrawals from US high-yield bond funds, averaging $2bn per week in March. Leveraged loans, particularly those tied to the software sector, saw $887mn in weekly outflows, contrasting sharply with prior inflows. Qualtrics halted over $5bn in debt sales amid AI-driven caution, while Sealed Air sweetened terms to close a $7.2bn deal.

Rising Treasury yields and widening credit spreads pushed investment-grade bond yields to 5.15%, attracting $5.2bn in weekly inflows. Experts warn liquidity strains and default risks may escalate if volatility persists.