From Nasdaq: 2025-05-31 18:20:00

In recent months, tariffs have taken center stage in the stock market, replacing artificial intelligence as the key buzzword following President Trump’s tariff announcements on April 2. Investors are closely monitoring negotiations with major trade partners like the E.U. and China to assess the impact on vulnerable industries. A new market strategy known as the “TACO trade” has emerged, highlighting a pattern where stocks rebound whenever Trump reverses course on severe trade policies.

The TACO trade refers to a pattern where the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average experience a rebound whenever Trump retreats from aggressive tariff policies. The trade essentially translates to “buying the dip” when stock prices drop due to tariff rhetoric. The Vanguard S&P 500 ETF is highlighted as a prime opportunity to benefit from this trend, offering exposure to a diversified portfolio of top companies across various industries.

Investors are advised to consider dollar-cost averaging by regularly investing in the Vanguard S&P 500 ETF, despite the fluctuations caused by tariff negotiations. This long-term strategy aims to mitigate risk, lower average costs, and encourage consistent investing. The ETF’s performance history, weighted by market cap, indicates resilience in the face of economic challenges, making it a solid choice for portfolio diversification.



Read more at Nasdaq: Move Over FAANG, Enter the TACO Trade: This Monster ETF Could Be Poised to Take Off