Happy Friday, investors. The Dow just fell to its lowest level of the year and traders are pulling back their expectations for rate cuts even in the second half of 2026.

This morning, we’re turning our attention to the S&P 500’s biggest loser of the year so far.

Private credit tremors

The stock market is sending a clear warning signal about private credit.

The S&P 500’s financials sector has logged six losing sessions in a row and is now the worst-performing sector in the S&P 500 this year, down more than 11%.

Growing anxiety around private credit reached a crescendo Thursday with Morgan Stanley capping withdrawals from one of its funds, the latest indicator that investor confidence in the asset class is wobbling.

Morgan Stanley told investors that its $7.6 billion North Haven Private Income Fund received redemption requests equal to roughly 10.9% of outstanding shares during its quarterly cycle.

The fund honored only 5%, however, a previously disclosed cap designed to prevent managers from having to sell loans into a weak market.

The move may have been procedural, but the market reaction was not.

Morgan Stanley stock fell 4%. Shares of Blackstone, Goldman Sachs, Blue Owl, Ares Management and others in the industry tumbled as well.

The VanEck Alternative Asset Manager ETF dropped 3.4% on the day to bring its year-to-date loss to 27%.

Before Morgan Stanley’s move, Blue Owl and BlackRock restricted withdrawals from certain funds too, while JPMorgan has reportedly tightened lending to some private credit vehicles.

Taken together, it makes sense why investors are backing off the entire financials sector.

Banks, asset managers and alternative lenders sit closest to the credit cycle. When the market starts questioning the liquidity or valuations of loans inside private portfolios, those concerns tend to surface first in equities.

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📨 The White House is considering a Jones Act waiver. This limited-time move would speed up key oil and food shipments and, ideally, ease upward pressure on crude prices. (WSJ)

🛢President Trump plans to sell 172 million barrels from the US strategic reserve. The process would lead to a drop of more than 40% of the country’s energy backstop, and leave the reserves at levels last seen in the early 1980s. (Yahoo Finance)

🏚The Senate passed a historic housing bill. It will give local governments incentives to make it easier for companies to build single-family homes, and it also bans investors from buying single-family homes. (CNBC)

💰Business is changing in seismic ways. Our friends at Semafor just launched Compound Interest, a new podcast featuring the operators, experts and innovators behind the world’s most consequential companies. Tune in to the latest episode with Bilt’s CEO unpacking the platform’s Amex-Shopify-Square ambitions.

🗓 March 13, 1986: Microsoft debuted on the NASDAQ with an IPO price of $21 per share and a valuation at roughly $780 million.

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