Countries may want to think twice before threatening default.
As part of an appeal from a lower-court ruling, Argentina said it might not pay what it owes to longtime holders of its sovereign debt. But the U.S. Supreme Court announced Monday that it wouldn't overturn the lower-court's ruling.
Read MoreU.S. top court rejects Argentina appeal in bond fight
The court separately said Monday that creditors can seek information about Argentina's non-U.S. assets, a permission hedge funds had pushed for in hopes of proving the country actually had the means to pay off on its bonds.
Read MoreU.S. top court rules against Argentina in bonds discovery case
Traders reacted to the news by further driving up the cost for Argentina to borrow money in international markets. The price of existing bonds fell along with a rise in their yield. And the cost of buying five-year credit default swaps—the cost of insuring against the default—rose nearly 60 percent Monday.