Overview
- The 'TACO trade'—Trump Always Chickens Out—has become a widespread strategy as investors buy the dip after his tariff reversals.
- Markets swung sharply when Trump took to Truth Social to allege that China breached their recent trade pact.
- Traders captured quick gains of about 2.7% in the S&P 500 and up to 6.1% in select AI stocks by betting on rebounds.
- After imposing 125% tariffs on Chinese goods, Trump rolled them back to 30% for 90 days and pushed planned 50% EU levies from June 1 to July 9.
- Analysts warn the dip-buying tactic may falter if Trump holds firm on tariffs, even as former aide Alyssa Farah Griffin argues it ultimately aids his agenda.