The TACO trade is alive and well.
About 90 minutes before the 8 p.m. ET deadline set by Donald Trump for a deal with Iran, the president announced a two-week ceasefire.
Brent crude futures slumped as much as 16%, while WTI crude plummeted as much as 19%. Both grades are now below $100 per barrel.
Stock futures on all three major US indexes ripped roughly 2% higher.
And with that, the now-famous “Trump Always Chickens Out” trope has come to fruition yet again. Investors were waiting for it, and ready to take profits on oil.
To the market’s credit, it didn’t fall for Trump’s fiery threat on Tuesday that “a whole civilization will die tonight” — the S&P 500 and Nasdaq actually finished positive in regular-hours trading. After more than a few TACO instances, traders are getting wise to Trump’s push-and-pull routine.
The de-escalation is welcome news for an S&P 500 that finished Tuesday down 5% from recent highs. Brent crude, meanwhile, is still 50% above where it was before the Iran war started.
Here’s a rundown of major moves on Tuesday evening:
- S&P 500 futures: +2.2%
- Dow Jones Industrial Average futures: +2%
- Nasdaq 100 futures: 2.9%
- Brent crude: -13.2% to $94.86
- WTI crude: -15% to $96.38
