Investors are hedging against corporate defaults at a record pace: Trading volume in the world's largest credit default swap (CDS) indexes surged +69% in Q1 2026, to $4.5 trillion, the highest on record. This exceeds the previous record set in Q2 2025 during the tariff turmoil by +36%. This is also +350% higher than the ~$1.0 trillion traded in Q4 2019, before the pandemic. The surge has been driven by the Iran War and growing concerns that AI could reshape entire industries and weaken their ability to service debt. In Europe, net investor positioning on credit indexes has turned bearish for the first time since 2018. Defensive positioning in the market is accelerating.