Saturday, 31 May 2025

Investing Updates : Can the TACO Trade Push U.S. Stocks Back to Record Highs?


Source : 



Apple Intelligence : 


Market Reaction to Tariff Ruling: Brief market rally on May 28, 2025, due to a U.S. court ruling declaring President Trump’s “Liberation Day” tariffs unlawful, followed by a temporary stay on May 29, 2025.


TACO Trade and Market Recovery: The “TACO Trade” (Trump Always Chickens Out), where investors anticipate and capitalize on President Trump’s tendency to backtrack on tariff threats, contributed to the S&P 500 Index’s rebound in 2025.


Impact of Tariffs on Stocks: While tariffs could potentially hinder the market’s upward trajectory, investors are anticipating the TACO Trade to mitigate any negative effects.


Market Impact of Tariffs: Trump’s tariff announcements and subsequent pauses caused significant market fluctuations, with steep tariffs leading to market drops and pauses triggering surges.


Tariff Rollercoaster on Specific Countries: Tariffs on Chinese goods were initially spiked to 145% before being cut to 30%, while threats of tariffs on EU goods were delayed, impacting the markets.


Factors for Market Growth: Potential rate cuts, sustained corporate earnings growth, and projected foreign investment could contribute to the market reaching new highs.


Tech Giants’ Performance: The “Magnificent 7” tech giants are regaining momentum, trading at 42x trailing P/E ratios, with potential for further gains.


Lagging Stocks: Stocks like NVIDIA and Tesla are still below their all-time highs, indicating potential for growth compared to the broader market.


Investor Sentiment: Investors are optimistic about TACO-driven rebounds and strong fundamentals, anticipating further market gains.

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