Wall Street is betting Trump backs down on Iran — but what if the ‘TACO’ trade fails this time?

In September 2025, investors' historical pattern of purchasing assets after Trump administration threats toward Iran did not materialize as expected. Markets had previously followed a pattern where statements from the Trump administration regarding Iran were followed by de-escalation, but this pattern changed in September. The specific actions taken by the administration and market movements during this period shifted investor behavior from the established strategy.

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