Investment-grade credit trends improved over Q1 2024 as upgrades (including a healthy number of rising stars) outpaced downgrades--reversing the trend of Q4 2023. However, recent increases in negative outlook/CreditWatch suggest this trend may not be sustainable. Market tone has also shifted since the start of Q2 2024 due to rising geopolitical risks and tempered expectations regarding U.S rate cuts. Some sectors that were already subject to potential stress may prove increasingly susceptible to risks and uncertainties--including U.S and European homebuilders and real estate, U.S. regional banks, and U.S. chemical issuers.