Private credit funds are limiting withdrawals and credit spreads are rising, but the fear looks overdone, which could be good news for stock buyers.

• Blue Owl capped withdrawals from two of its lending funds after investors asked for far more money than it could hand back without dumping assets cheaply.
• Much of the rise in junk bond rates is just the 10-year Treasury jumping from under 5% toward 5.25%, not a wave of defaults.
• Spreads are still well below where they sat during the Iran conflict, so this is stress, not a shock.
• Higher borrowing costs hit AI-linked companies like CoreWeave and NScale hardest, and AI now drives a big share of US growth.
• Earnings are rising faster than stock prices, which makes stocks like Nvidia cheaper than they were, not more expensive.

Outlook: An Iran deal or lower rates would pull credit stress back down fast, turning the current scare into a buying window.