US finances are deteriorating while the government pours billions into new weapons programs — bad news for bond holders, taxpayers, and anyone counting on calm markets.

• Trump announced a $3.7 billion submarine parts shipyard in Maryland, funded by more borrowing.
• Distressed US loans hit their highest level since the pandemic, and JP Morgan expects more defaults.
• Bond yields keep climbing as foreign buyers sell US debt; Treasury Secretary Scott Bessent's plan to scrap the 20-year bond is being read as panic, not strategy.
• Shipping through the Strait of Hormuz has turned into hazard work — tanker captains are being offered $100,000 a month plus bonuses after dozens of ship attacks and sailor deaths this year.
• Bank of America analysts call AI stocks a bubble but still tell clients to buy in, even as money flees bonds.

Outlook: With deficits unaddressed and war premiums rising, yields are likely to keep pushing higher while stocks ride the AI boom on borrowed time.