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Bloomberg Marketsglobal

Why the AI ‘Scare Trade’ Keeps Spooking Markets

Bloomberg Markets
Friday, February 27, 2026 at 2:38 PM
~4 min read
TradeEquities

Original Report

Over the past three years, investors have sought exposure to all things artificial intelligence, including high-flying tech stocks behind some of the leading AI technology. Recently, though, the...

Over the past three years, investors have sought exposure to all things artificial intelligence, including high-flying tech stocks behind some of the leading AI technology. Recently, though, the market’s focus has shifted, as predictions that AI will be so successful that it might supplant the need for many types of businesses and workers has driven some stocks down sharply. Wall Street is calling it the “AI scare trade.”

Glass House Analysis

Labor market conditions shape the lived experience of millions of working families. When jobs are plentiful, workers have leverage to demand better wages and conditions; when they're scarce, the balance of power shifts to employers. This dynamic plays out daily in kitchen tables across America, where families make decisions about whether to ask for a raise, change jobs, or accept less-than-ideal conditions out of necessity.

International economic policy has concrete impacts far beyond diplomatic circles. Tariffs show up in the price of goods at stores, supply chain disruptions affect whether products are on shelves, and trade tensions can mean job losses in export-dependent industries. The globalized economy means that decisions made abroad can affect workers and consumers domestically.

The implications extend beyond the immediate news cycle. Every economic development creates ripples that affect employment, prices, and opportunities in ways that may not be immediately visible but are deeply felt. By tracking these connections, we can better understand how the economy truly works—not as an abstract machine, but as a human system shaped by and shaping the lives of millions.

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