Stocks staged a historic comeback from their April lows, finishing the first half of the year on a high note with the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) securing back-to-back all-time records.
A large part of the market’s gains has hinged on easing geopolitical tensions and tariff-related deescalations, including the emergence of the so-called TACO trade, an acronym for “Trump Always Chickens Out.”
The phrase captures a belief among some investors that the president often talks tough on tariffs but rarely follows through. That assumption has helped fuel a tailwind for markets in recent months as traders increasingly bet on last-minute policy pivots.
Trade deal frameworks with China and the UK are reportedly now on the table ahead of Trump’s self-imposed July 9 deadline. This has led investors to price in a “Goldilocks scenario” for stocks, with sustained…
