'This is a roller coaster ride': How Trump's tariffs turned the 'TACO' trade into Wall Street's biggest debate

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0;switch(e){case"expanded_panel":o='{promoMarkup}{notifMarkup}',a=t._store.getNotifications(),r=t._generatePanelMarkup(o,a),i.innerHTML=r;break;case"error_panel":r=(o='{errorMsg}').replace("{errorMsg}",t._config.panel.errorMsg),i.innerHTML=r}n&&n()}else n&&n(new Error("No panel parent"))}},{key:"createPanelParentNode",value:function(e){e&&(e.innerHTML='',this._panelNode=document.getElementById(P))}},{key:"updateBadgeNode",value:function(e){if(e){var n=this._store.getNotifications().newCount,t=this._config.badge.maxCount;if(n){var o=n>t?t+"+":n;e.innerHTML=o}else e.innerHTML=""}}},{key:"addStyles",value:function(e){if(e&&"undefined"!=typeof window){var n=document.getElementById(this._config.panel.styleTagId);n||((n=document.createElement("style")).type="text/css",n.id=this._config.panel.styleTagId,n.innerText=e,document.head.appendChild(n))}}}]),e}(),U=function(){function e(n,t,o){L(this,e);var i=this;i._store=t,i._view=o,i._config=n;var r=i._config.panel;i._panelParentNode=document.querySelector(r.parentSelector),i._badgeNode=i._config.badge.selector&&document.querySelector(i._config.badge.selector),i._indicatorNode=r.indicatorSelector&&document.querySelector(r.indicatorSelector)}return k(e,[{key:"createPanelParentNode",value:function(){this._view.createPanelParentNode(this._panelParentNode),this._notifPanelNode=document.getElementById(P)}},{key:"refreshPanelNode",value:function(e,n){var t=this;C(t._notifPanelNode,q),t._store.fetchNotifications(e,(function(e,o){var i=window.wafer&&window.wafer.base;i&&i.destroy(t._notifPanelNode),e?t._notifPanelNode.innerHTML||(t._view.render("error_panel"),C(t._notifPanelNode,q)):(t._view.render("expanded_panel"),t._view.updateBadgeNode(t._badgeNode),t._showBadge(),t._showIndicator(),t._view.addStyles(o.css)),M(t._notifPanelNode,q),i&&i.sync(t._notifPanelNode.parentNode),n&&n(e,o)}))}},{key:"resetBadge",value:function(){var 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In the midst of the chaos, one phrase kept surfacing across Wall Street: the "TACO" trade.An acronym for "Trump Always Chickens Out," it captures a growing belief among investors that the president talks tough on tariffs but rarely follows through. That assumption has fueled a market tailwind in recent months as traders bet on policy pivots, buoyed by an initial US-China tariff deescalation earlier this month.But that narrative hit turbulence this week when Trump lashed out at China in a post on Truth Social, accusing the country of having "violated" its trade deal with the US. While he did not provide specifics, the comments echoed earlier rhetoric from his administration suggesting that negotiations with Beijing had "stalled."Meanwhile, Bloomberg reported that the Trump administration plans to expand tech restrictions on China by targeting subsidiaries of already-sanctioned firms, aiming to close loopholes that allow Beijing to circumvent existing curbs. The news sent stocks sharply lower on Friday.Still, despite those headlines, markets had largely been leaning into the idea that Trump's tough talk rarely translates into tough action. It's a bet that's paid off: Stocks have not only erased their "Liberation Day" losses, but the S&P 500 (^GSPC) secured its best May since 1990 and had the best month since Nov. 2023.But while some on Wall Street still lean into that pattern, others are warning that the trade's logic may have run its course."We told Donald Trump that we have this 'TACO' trade," Julie Beale, chief market strategist at Kayne Anderson Rudnick, told Yahoo Finance on Thursday, referencing a reporter's question to Trump earlier in the week about the trade. In response, Trump slammed the term, defending his trade stance and brushing off the question as "nasty.""I worry [that] actually makes him bear down a little bit more and decide to be more resilient and more gripping on some of these tariff trades," Beale said. "So I have a little bit of a concern that creates actually more uncertainty."For the most part, this uncertainty has worked in many investors' favor, especially retail traders who have jumped in to "buy the dip" in record numbers, capitalizing on the familiar pattern of policy threats followed by swift deescalation."They've been able to take advantage of that," Beale said. "A lot of people don't want to be caught out on these big moves upwards."Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P 5005,911.69 -0.48 (-0.01%)Dow 3042,270.07 +54.37 (+0.13%)Nasdaq19,113.77 -62.13 (-0.32%)Russell 20002,066.29 -8.49 (-0.41%)VIX18.57 -0.61 (-3.18%)Gold3,315.40 -28.50 (-0.85%)PortfolioSign in to access your portfolioSign inTop gainersRGC Regencell Bioscience Holdings Limited 877.00 +136.02 (+18.36%)PONY Pony AI Inc. 19.26 +2.11 (+12.30%)ULTA Ulta Beauty, Inc. 471.46 +49.67 (+11.78%)MP MP Materials Corp. 21.79 +2.02 (+10.22%)ZS Zscaler, Inc. 275.70 +24.59 (+9.79%)Top losersSMMT Summit Therapeutics Inc. 18.22 -7.99 (-30.50%)GAP The Gap, Inc. 22.31 -5.64 (-20.18%)REGN Regeneron Pharmaceuticals, Inc. 490.28 -115.11 (-19.01%)AMBA Ambarella, Inc. 52.64 -9.36 (-15.10%)COO The Cooper Companies, Inc. 68.28 -11.68 (-14.61%)Most activeNVDA NVIDIA Corporation 135.13 -4.06 (-2.92%)LCID Lucid Group, Inc. 2.2300 -0.1800 (-7.47%)PLTR Palantir Technologies Inc. 131.78 +9.46 (+7.73%)F Ford Motor Company 10.38 +0.16 (+1.57%)TSLA Tesla, Inc. 346.46 -11.97 (-3.34%)Earnings eventsTrending tickersELF e.l.f. 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