Credit investors are increasingly buying corporate bonds, attracted by high yields and strong earnings from blue-chip companies, despite ongoing geopolitical tensions in the Middle East. On Thursday, risk premiums on US investment-grade bonds dropped to their lowest since February, while Gilead Sciences Inc. successfully sold longer-dated debt at a yield lower than its existing bonds, indicating robust demand. Inflows into investment-grade bond funds reached approximately $4 billion in the week ending May 13, marking the largest weekly inflow since September 2020. This trend comes as government debt has sold off due to inflation concerns, with the 10-year Treasury yield hitting its highest level in about a year. Analysts suggest that corporate balance sheets remain strong, contrasting with deteriorating government finances. However, concerns linger about the impact of sustained high energy prices on corporate margins. Despite the risks, investor appetite for new bond issues remains strong, with recent offerings attracting orders up to four times the amount sold. Overall, strong corporate earnings, which exceeded estimates by 13% in the first quarter, continue to support positive investor sentiment in the credit markets.