Regional trading markets rise on TACO – Trump Always Chickens Out

Josh Gilbert, Market Analyst at eToro
Josh Gilbert, Market Analyst at eToro

Despite continued geopolitical uncertainty, the S&P 500 has surged over 25% since its April low, recently hitting a new all-time high for 2025. This rally, now considered one of the strongest in recent memory, is being partly attributed to a market phenomenon informally dubbed TACO – Trump Always Chickens Out – which reflects investor belief that the White House may ultimately soften its trade stance.

Global markets have shown impressive resilience in 2025 despite escalating trade tensions and shifting tariff deadlines. The latest move by US President Donald Trump to postpone the implementation of reciprocal tariffs to August 1 has extended the window for potential negotiations, helping calm short-term investor concerns.

“All-time highs tend to make investors nervous, but history shows they are often followed by continued strength,” said Josh Gilbert, Market Analyst at eToro.

“A recent study from BNY revealed that since 1950, the S&P 500 has delivered solid 1, 3, and 5-year returns from a new all-time high. Investors who remain on the sidelines may miss out on significant long-term gains.”

Still, caution is warranted. The upcoming tariff deadline could reignite market volatility, particularly if negotiations break down or new tariffs exacerbate inflationary pressures in the U.S.

Closer to home, UAE markets have continued their strong performance, largely unshaken by global trade headwinds. The Dubai Financial Market, DFM recently hit a 17-year high following three consecutive weeks of gains, with Union Properties and Emirates NBD among the top performers. Meanwhile, the Abu Dhabi Securities Exchange, ADX is nearing its own record highs.

Supportive factors such as robust local economic fundamentals and higher oil prices have contributed to the region’s strength. As global investors seek stability, the UAE is increasingly seen as a relative safe haven.

“The local market’s momentum reflects confidence in the UAE’s economic outlook,” Gilbert added. “However, investors should remain vigilant. Any escalation in US trade actions could have ripple effects, even in markets that have so far been insulated.”

With the August 1 tariff deadline approaching, markets are expected to respond quickly to any major headlines related to trade negotiations. While the outlook remains broadly positive, global developments could still test the UAE’s market resilience in the weeks ahead.

eToro is authorised and regulated by the Financial Conduct Authority in the UK, in Cyprus by the Cyprus Securities and Exchange Commission, by the Australian Securities and Investments Commission in Australia, licensed by the Financial Services Authority in the Seychelles and by the Abu Dhabi Global Market.

 

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