When it comes to the war in Iran don’t go betting on the TACO trade, says top J.P. Morgan investment strategist

While there have been happier times on Wall Street, President Trump’s military intervention in Iran hasn’t yet pushed the bottom to fall out of markets. Over the weekend, Iran elected a new leader that the White House disapproves of (Mojtaba Khamenei, the son of the late supreme leader, Ali Khamenei), and oil prices began climbing north of $100 a barrel. Many expect Khamenei to continue in the policy footsteps of his father, and the rhetoric from the Oval Office has ramped up in response.But despite these tensions, investors and analysts are still clinging to the timeline President Trump outlined when the action began: four or five weeks, though potentially longer if necessary.

The baseline that Trump will either retreat or reach a deal within a month, a sceptic might argue, echoes a trade now familiar to Wall Street under Trump 2.0: “TACO.” Rather, Trump Always Chickens Out. It’s a bet that has paid off a handful of times since the president returned to the Oval Office, particularly regarding Trump’s aggressive foreign policy on tariffs, which are often quickly reversed.

Indeed, some investment outfits have speculated that the Iran conflict presents an attractive buy-the-dip opportunity, with investors landing bargains at the height of........

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