TACO trade backfires on Wall Street as Trump charges ahead on tariffs

The markets rejected the risks of customs tariffs according to the assumption that Trump would follow a previous pattern and decline, while it became known as the so -called Taco Trade.

This allowed shares to reach new high -indexes, which is an amazing recovery from the collapse caused by the mutual “liberation day” tariff in April.

But Trump seized the highest levels of this stock market to justify the pressure in front of him at his aggressive identification rates.

“I think the tariff was well received. The stock market has registered the highest new level today,” NBC News told NBC News on Thursday.

The foundation rate of 15 % -20 % suggested, higher than the current level of 10 % in all areas.

This came when he continued to reveal messages to trade partners in the United States throughout the week, putting the tariff prices that they will face by August 1 if commercial deals were not reached. On Saturday, the European Union and Mexico threatened at 30 %.

While letters are largely a tactical negotiation, stocks have fell from their highest levels ever, as doubts about Taco trade begin to crawl.

“It seems that the markets believe that Trump will decline again,” Capital Economy Economy said in a memorandum on Friday. “We are not sure.”

For his part, Trump did not repeat his mutual definition on Wednesday, when a 90 -day stand was scheduled to end. But the new schedule on August 1 provides only a few weeks of breathing space to reach commercial deals that will avoid the high rates in dozens of messages.

Meanwhile, Trump is pressing on the sector’s duties, and announces a 50 % tariff on copper and warning that imported drugs may face a rate of 200 %.

Currently, the stocks do not witness a repetition of the April collapse, when the S&P 500 index decreased by almost 20 % from its previous height to the bear market. The relatively silent interaction is assumed to the Taco trade.

“But this creates a dangerous circular, given that the main reason for compelling Trump to attach the liberation day plans was originally due to the sale not only in the stock market but also the treasury market,” said Capital Incoucs. “Without this pressure, Trump may feel more shortened to follow this time, especially – at least – at least – it seems that there is little impact on the prices of the final consumer goods and the demands that the economy will make a mistake.”

Jimmy Damon, CEO of JPMorgan, has warned that investors seem to be satisfied with the risk of Trump’s tariff, and UBS has similarly afflicted the “paradox” between the Taco and Trump trade.

Bank of America has highlighted the market’s failure to regulate a rebellion against the new Trump tariff, describing it as “the game that never ends.”

They added that the stocks ignore the latest shocks, as it is unlikely to be affected by the confidence of the consumer. But this also means that the Trump administration has more designing incentives, because the marginal cost to do so is low.

“The next question is then the amount of escalation of risky assets ready to tolerate before correcting less and how much pain will be tolerated by Trump until the escalation occurs, as happened in April,” said Boufa. “In other words, the game between Trump and the market is subject to a multiple balance.”

In other words, Trump Wall Street can continue to wander.