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Wall Street's 'TACO Trade' Powers Stock Rally as Trump Defers Tariff Threats

  • Investors widely adopted the 'TACO trade' as stocks rallied following President Trump's repeated tariff threat retreats in 2025 U.S. Markets.
  • This trend emerged because Trump frequently announced high tariffs then delayed or lowered them, creating market volatility and recovery cycles.
  • The term 'TACO,' an acronym for 'Trump Always Chickens Out,' was created by Robert Armstrong, a columnist at The Financial Times, and gained widespread attention through viral memes and social media.
  • Trump's 145% tariffs on Chinese goods were cut to 30% for 90 days starting May 12, and a planned 50% tariff on EU goods was postponed to July 9 to allow negotiations.
  • The 'TACO trade' implies investors anticipate Trump's tariff threats to cause sell-offs but ultimately expect him to relent, prompting stock rallies after downturns.
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svt Nyheter broke the news in Stockholm, Sweden on Tuesday, May 27, 2025.
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