The first half of 2026 has produced 372 large corporate bankruptcies in the US, pushing business failure rates to levels not seen in over 16 years. In a normal world, that kind of carnage would send credit markets into a tailspin. Instead, bond spreads have barely budged.
The numbers tell a split story
Total US bankruptcy filings reached 574,314 for the 12 months ending December 2025, an 11% jump year-over-year. Business-specific filings accounted for 24,737 during that period, and the trajectory has only steepened heading into 2026.
Subchapter V filings, the fast-track bankruptcy process designed for small businesses, saw a sharp increase in the first quarter of 2026. That’s a leading indicator worth watching, because small business distress tends to cascade upward through supply chains and regional economies.
Yet credit and bond markets have shown limited distress signals. Pricing remains stable. Default expectations, at least as expressed through market instruments, haven’t spiked in the way you’d expect given a 16-year high in corporate failures.
