Wall Street is increasingly betting that Trump will blink first in the tariffs stand-off

Trump Always Chickens Out – or TACO for short. Investors like narratives to explain the financial world, and they appear to have seized on this one: whenever Donald Trump faces a market backlash, he will back down.

It would be fair to say the US president did not take kindly to the suggestion that he was being a “chicken” when asked by a reporter at the White House about the term that is gaining traction on Wall Street.

“But don’t ever say what you said,” he added to the reporter. “That’s a nasty question.” Apparently riled, he later returned to the theme, insisting that he was no chicken, and that often people accused him of being too tough.

But recurrent retreats by Trump have become the basis for stock markets rebounding after falls, even as the US president has raised tariffs to their highest level in more than a century.