Mega-cap CDS market is new, and it's already flashing a warning
As seen on the 24/7 Wall St. homepage on October 25, 2026.
Credit markets now charge a rising price to insure the biggest balance sheets in the index, a market that did not exist a year ago. Equity holders rarely get an earlier warning signal than this one.
Up until late 2025, there were no credit default swaps trading for most of the mega-caps. There are now, and the cost to insure against default has increased steadily as the year has gone on, as you can see in the mega-cap CDS index we’ve made below: https://t.co/TkVsyDUAgF
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Credit default swaps are insurance contracts against a borrower failing to pay its debts, and until late 2025 the biggest technology and consumer giants were considered so financially formidable that no such market existed for them.
Since that market opened, the cost to buy that insurance has moved in one direction: up, according to the mega-cap CDS index Bespoke constructed.
For equity investors, a rising CDS spread is one of the more reliable early-warning signals available. Credit traders tend to reprice risk before stock prices fully reflect it.
The fact that this market did not exist a year ago makes the directional trend harder to dismiss as noise. A brand-new instrument pricing in rising default risk on the largest balance sheets in the index is a signal worth monitoring closely as the year closes out.