DB raises S&P target betting on TACO

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Chadha raised his year-end S&P 500 forecast by 6.5%, to 6,550 from 6,150, implying roughly 10% upside from Monday’s close. The strategist was one of the biggest bulls on Wall Street coming into 2025, with an original price target of 7,000, but cut his target in April after the severity of President Donald Trump’s initial tariff announcement shocked Wall Street. Fundstrat’s Tom Lee is currently the biggest bull on the Street, with a 6,600 price target, according to the CNBC market strategist survey.

Now the strategist expects that the fundamental corporate earnings strength underpinning his original thesis will hold, betting that the so-called “TACO trade” will curb any market or economic fallout. The “TACO trade,” or “Trump Always Chickens Out,” refers to an idea coined by a Financial Times columnist that investors can count on the president to back down from tariffs. The phrase has gained in popularity on Wall Street. CNBC’s Megan Cassella asked Trump directly about it in the Oval Office last week.

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