According to CNBC, cracks are forming in the junk bond market as investors demand higher payouts for the riskiest debt, with high-yield bonds yielding 8.1%, up from 7.22% a month ago. Credit spreads have widened to 315 basis points in the overall market, while the lowest-rated CCC-and-below cohort has seen spreads climb to roughly 1,250 basis points.

Michael Arone, chief investment strategist at State Street Investment Management, said the market is "flashing yellow" but remains "far from red," while Kelley Gerrity of Morgan Stanley Investment Management said credit quality is at a record high, with BB bonds making up more than 60% of the market versus 38% before the global financial crisis. Collin Martin of the Schwab Center for Financial Research said the widening has been orderly and that it is too early to say stress is spreading across the broader credit market.

Investors are watching for a steeper widening in the broader high-yield market, especially in the BB cohort, where spreads are at 194 basis points, up from 179 basis points a year ago. R.J. Gallo, chief investment officer of global fixed income at Federated Hermes, said high yield typically comes under real pressure when the economy is heading into a sharp downturn, but he said a recession is not the odds-on bet.