Daily Business News Digest — Saturday, February 28, 2026

40 articles analyzed · 2 sources · 5 key highlights

Key Highlights

Market Turmoil as AI Fears, Geopolitical Risks Converge

Wall Street closed out February with a cascade of concerns sending shockwaves through financial markets. The convergence of artificial intelligence disruption fears, credit market stress, escalating Middle East tensions, and the fallout from the Supreme Court's tariff ruling created a perfect storm that left investors scrambling for safety. US tech stocks are headed for their worst month in nearly a year, while Treasuries posted their strongest monthly gains in twelve months as haven demand surged.

The AI Scare Trade Takes Hold

What Wall Street is now calling the "AI scare trade" has fundamentally altered market dynamics. The catalyst wasn't an earnings miss or Fed announcement, but rather a Substack thought experiment that sparked a reassessment of AI's disruptive potential across entire economic sectors. The selloff intensified dramatically when fintech giant Block Inc. announced massive layoffs, fueling anxiety that artificial intelligence is poised to upend broad sections of the economy. JPMorgan Chase issued a stark warning that between $40 billion and $150 billion of leveraged loans packaged into collateralized loan obligations could face AI-related disruption. US leveraged loans suffered their steepest monthly decline since 2022, while private credit giant Blue Owl Capital is on track for its worst month in nearly four years as credit fears mount. The shift represents a complete inversion of investor sentiment. For three years, markets chased AI exposure relentlessly. Now, predictions that AI will be so successful it might eliminate the need for many businesses and workers has triggered widespread panic selling. Former Obama economic adviser Jason Furman questioned whether the AI boom justifies the massive investment already committed, noting that "policy uncertainty remains high" even as President Trump touts a "roaring" economy.

Media Mega-Deal Reshapes Entertainment Landscape

In the largest media transaction in years, Paramount Skydance Corp. announced a $111 billion takeover of Warner Bros. Discovery, creating an entertainment behemoth designed to compete with tech giants that now dominate Hollywood. Code-named "Project Warrior," the Ellison father-and-son team viewed the deal as a matter of survival in an industry increasingly controlled by deep-pocketed technology companies. The transaction will require Wall Street banks to raise $57.5 billion in debt financing—an unusual combination of investment-grade and junk-rated bonds as lenders tap every available market. S&P Global analysts warned the deal will strain Paramount's credit rating, though the combined entity could potentially reduce debt levels over time. The transaction underscores how traditional media companies are being forced into consolidation to achieve the scale necessary to compete with streaming giants.

OpenAI's Record War Chest and Pentagon Standoff

Sam Altman's OpenAI secured up to $110 billion in what ranks as a record funding deal, restocking its war chest for an intensifying battle with Anthropic and Google in the AI arms race. The funding comes as the competitive landscape grows increasingly complex, with both technological and ethical dimensions. President Trump announced plans to cut Anthropic from government contracts within six months, escalating a feud over the AI startup's refusal to allow military use of its technology. The move has galvanized Big Tech workers at Amazon, Google, and Microsoft, who are pressing their executives to adopt tough AI guardrails and refuse defense contracts. The standoff highlights growing tensions between commercial AI development, national security interests, and employee activism around ethical technology use.

Tariff Chaos Creates Legal Avalanche

The Supreme Court's decision declaring most of President Trump's global tariffs illegal has unleashed a flood of litigation. More than 100 companies filed new lawsuits in just the first few days following the ruling, with Trump now facing over 2,000 tariff-related legal actions. The core issue: widespread concern that the administration won't readily refund the billions of dollars already collected. Businesses are scrambling to file claims and secure refunds, creating administrative chaos across multiple agencies. India announced it's in discussions with the US to protect its interests under a recently concluded trade deal, while the tariff uncertainty continues to weigh on corporate planning and investment decisions.

Credit Market Stress and Geopolitical Flashpoints

Beyond AI and tariffs, multiple stress points emerged across global markets. Swiss authorities took the extraordinary step of shutting down MBaer Merchant Bank over alleged sanctions breaches, calling it a risk to the country's financial system. In the UK, the collapse of Market Financial Solutions revealed potential losses of £930 million ($1.3 billion) as creditors discovered collateral had been double-pledged, with Wall Street lenders including Barclays facing exposure. Geopolitical tensions added to market anxiety. Hedge funds increased bullish oil bets to a 22-month high amid fears that US military action in the Middle East could disrupt supplies, with oil prices jumping as the UK withdrew embassy staff from Iran. President Trump's unexpected comments about a "friendly takeover" of Cuba during an energy blockade further rattled markets already on edge.

Outlook: Navigating Uncertainty

As February closes, investors face a fundamentally altered landscape. The AI revolution that powered markets higher for three years is now generating as much fear as excitement. Credit markets are showing strain, geopolitical risks are multiplying, and the tariff regime remains in legal limbo. Treasury bonds' strong performance underscores that despite all the disruption, US government debt remains the premier safe haven in turbulent times. The coming weeks will test whether current market stability masks deeper structural risks, as Jason Furman suggested, or whether the economy can absorb these shocks and continue its steady growth trajectory.