Modest Default Rate Masks Shaky Credit Foundation, Moody’s Says

US corporate default rates moderated in the first quarter, says Moody’s Ratings, but conflict in the Middle East, stress in the software sector and questions about where interest rates are headed threaten to upend the market calm.

Only 16 companies defaulted in the first quarter of 2026, unchanged from a year ago, according to Moody’s. That translates to a roughly 5% default rate, which the ratings firm expects to fall below 3% over the next year. However, Moody’s warned that the risks are growing, and in a more pessimistic scenario, the default rate could climb to nearly 8%.

“Potential credit ...