After Trump's Greenland Deal, Wall Street Is Talking Up the 'TACO Trade' Again. What's Next?

Core Insights - U.S. stocks are experiencing gains following President Trump's decision to avoid forceful actions regarding Greenland and not impose new tariffs on European nations, which has led to a positive market sentiment [1][8] Group 1: Market Reactions - The stock market has been on an upward trend, reaching record highs in 2026, despite uncertainties related to President Trump's political maneuvers [3] - The TACO (Trump Always Chickens Out) concept has emerged, reflecting investors' strategies to buy assets affected by Trump's threats, anticipating a rebound [2][4] - The S&P 500 saw a significant increase of over 37% from its April lows to the end of 2025, indicating the effectiveness of the "buy the dip" strategy [5] Group 2: Investor Sentiment - Investors are becoming more comfortable with Trump's unpredictable tactics, as evidenced by the market's resilience to events that would have previously caused panic [7][10] - The recent rally in stocks suggests that investors are less reactive to trade policy changes, indicating a shift in market sensitivity [10] - The TACO Trade strategy relies on market panic, which has been less pronounced recently, as investors seem to expect Trump's reversals [6][8] Group 3: Broader Economic Context - The U.S. stock market's response to geopolitical events, such as the capture of Venezuelan President Nicolás Maduro, has been positive, with the Dow Jones Industrial Average reaching record highs [9] - The relationship between Trump and Wall Street remains unpredictable, suggesting ongoing volatility in market reactions to his policies [11]