Markets

It's difficult to tell whether the markets were more affected by spiking oil prices, eroding peace talks between the United States and Iran, or Kevin Warsh's hawkish comments during his confirmation hearing to chair the Federal Reserve, said James Pruskowski, managing director at Hennion & Walsh.

The Texas city's latest projection for the onset of a Level 1 emergency comes as water woes spurred rating downgrades and negative outlooks since last fall.

Market Intelligence analyst Jeff Lipton warns that as ESSER-era support fades, shifting enrollment patterns, voucher expansion, tax-cut dynamics and rising costs are exposing credit stress in parts of the K-12 sector — making security selection and disclosure discipline more important in 2026 and beyond.

The risk of contagion to the rest of the high-yield market is limited, investors said.

Market support for taxables, particularly those from active issuers, remains firm. Taxables are seeing gains of 1.08% year-to-date, or 50 basis points above a UST index gain, said Kim Olsan, senior fixed income portfolio manager at NewSquare Capital.

The market is experiencing a "calm before a potential storm," said Chris Brigati, managing director and CIO at SWBC.

Two rating agencies dropped their Los Angeles Unified School District outlook to negative from stable.

Lincoln Center's expansion project shows its confidence in its fundraising abilities and future demand but analysts worry about the debt burden.  

"Ceasefire optimism augmented by a liquidity-driven risk-on macro market environment should be neutral for duration and positive for credit spreads," BofA analysts wrote.

The two-week ceasefire with Iran comes to an end Wednesday, though President Donald Trump said Thursday at an event in Las Vegas the war should be ending soon.