By Alexander Osipovich

A cheeky acronym is circling among market watchers again after President Trump's U-turn on Greenland: TACO, short for "Trump Always Chickens Out."

The term refers to a perceived pattern in which the president reverses course on a controversial move after stocks sell off. The acronym gained traction last year after Trump walked back his sweeping "Liberation Day" tariffs after market turmoil.

TACO returned on Wednesday after Trump dropped his threat to impose tariffs on European countries over his push to acquire Greenland. Stock futures rose early Thursday, and global equities rallied, after the Dow industrials jumped more than 500 points in the previous session.

"Hahaha. Announce something bad/dumb, and, by the time the last sellside note is out discussing its impact, TACO," Dario Perkins, managing director at research firm TS Lombard, tweeted on X.

Arindrajit Dube, an economics professor at the University of Massachusetts Amherst, noted investors have become desensitized to Trump's pronouncements because they anticipate he will change course. But that makes it less likely Trump will actually change course, because the president doesn't feel pressure from markets unless they sell off, Dube said.

"Over time, this will lead to bigger and bigger crises, because the markets are updating about TACO, so it will take more extreme action to make markets [think] he may not actually TACO," Dube posted on X.

"Fundamentally, the problem is TACO undermines itself," he added.

This item is part of a Wall Street Journal live coverage event. The full stream can be found by searching P/WSJL (WSJ Live Coverage).

(END) Dow Jones Newswires

January 22, 2026 06:03 ET (11:03 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.