TACO Time Is Over for Stocks

Investors have grown accustomed to the idea that Donald Trump-induced shocks rarely last long, because, as the popular TACO acronym tells us, “Trump Always Chickens Out.” But the president’s decision to join Israel in starting a war with Iran has opened a geopolitical and macroeconomic Pandora’s box that may make a tidy walk-back impossible. Under the surface, financial markets are starting to take note.

The TACO regime in US stocks — in which every selloff was a buying opportunity — may be officially over. That thesis will now get a test after Trump postponed threatened strikes against Iranian energy infrastructure and power plants for five days, pending the outcome of what he said were talks with Iran to end the 24-day war.