AI Fears Fuel Treasury Market Rally

Investors flock to long-dated government debt amid concerns over AI's impact on jobs

Published on Feb. 26, 2026

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The bond market has seen a surge of buying activity in recent weeks, with investors flocking to long-dated U.S. Treasury securities. According to LPL Financial's chief fixed-income strategist Lawrence Gillum, this rally is partly driven by broader fears about the potential for artificial intelligence to wipe out many jobs across the U.S.

Why it matters

The Treasury market is a crucial part of the $30 trillion U.S. bond market, and its performance can have significant implications for the broader economy. Investors' concerns about AI's disruptive impact on employment are now spilling over into this vital financial sector, potentially signaling broader economic uncertainty.

The details

Gillum noted that the recent surge of buying activity in long-dated government debt, which has pushed yields lower, is largely attributable to anxiety over AI's potential to automate and eliminate many U.S. jobs. This "AI fear trade" is now a key factor influencing the Treasury market's performance.

  • The bond market rally has occurred over the past month.

The players

Lawrence Gillum

The Charlotte, N.C.-based chief fixed-income strategist for broker-dealer LPL Financial.

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What they’re saying

“The AI fear trade appears to be spilling into the U.S. bond market.”

— Lawrence Gillum, Chief Fixed-Income Strategist (marketwatch.com)

The takeaway

The Treasury market's recent rally, driven by fears over AI's potential impact on employment, highlights the broader economic uncertainty surrounding the disruptive technology and its far-reaching implications for the financial sector and beyond.