Deutsche Bank Bets Big on U.S. Stocks as Trump’s “TACO” Trade Strategy Takes Center Stage

Wall Street is buzzing after Deutsche Bank made a bold move, upgrading its U.S. stock market forecast—and it’s all tied to former President Donald Trump’s unpredictable tariff policies. On June 3, 2025, the bank raised its year-end S&P 500 target to 6,550, predicting a 10% surge from current levels. The reason? Analysts believe Trump’s tendency to soften his aggressive trade stances—dubbed the “TACO” trade—will keep the market rally alive.

The term “TACO” (Trump Always Backs Down) was coined by Financial Times columnist Robert Armstrong, and it’s quickly become Wall Street’s favorite inside joke. The theory is simple: Trump proposes harsh tariffs, markets panic, but then he walks them back—sparking a rebound. The latest example? On April 8, 2025, the S&P 500 hit a 12-month low after Trump floated aggressive trade measures. But when he paused those tariffs, stocks soared 20%, proving the TACO trade’s power.

Deutsche Bank’s lead analyst Binky Chadha summed it up perfectly: “Trade escalations drive pullbacks, followed by relents which then spark rallies.” In other words, investors are betting that Trump’s bark is worse than his bite.

While traders cheer, political tensions are flaring. The White House isn’t thrilled with the TACO narrative. Trump called the term “nasty” in a press briefing, and spokesperson Kush Desai dismissed it as an “asinine meme.” Meanwhile, the Democratic National Committee (DNC) couldn’t resist trolling—they parked a taco truck near the RNC office with a poster of Trump as a chicken, mocking his policy reversals. VP JD Vance fired back, calling Democrats the “lamest opposition in history.”

But for investors, the drama is secondary to the profits. Juan Manuel Correa of BCA Research declared the TACO trade a “victory for global investors,” noting that markets are rebounding despite initial election-year jitters.

The S&P 500 is still down 1% since Election Day 2024, but the recent rally suggests optimism is growing. If Trump continues moderating his trade policies—whether by design or political necessity—analysts see more gains ahead.

For now, Wall Street is happy to play the TACO trade game. Whether Trump leans into the meme or fights it, one thing’s clear: investors are watching his every move.

Key Players Mentioned:
– Binky Chadha (Deutsche Bank)
– Robert Armstrong (Financial Times)
– Juan Manuel Correa (BCA Research)
– Kush Desai (Trump Spokesperson)
– JD Vance (Vice President)

Key Dates:
– April 8, 2025: Tariff pause sparks 20% market rally.
– June 3, 2025: Deutsche Bank upgrades S&P forecast.

Love it or hate it, the TACO trade is shaping markets—and proving once again that politics and finance are deeply intertwined.