Trump TACO formula gets a real-time test after Iran ceasefire
Signum Global Advisors had forecast a Trump policy turn on Iran between July 22 and July 30, before a weekend ceasefire calmed markets.
By Sal Moretti · Money Reporter
3 min read
A Trump TACO formula built by Signum Global Advisors is getting attention on Wall Street after the geopolitical-risk firm’s model pointed to a possible U.S. policy shift on Iran days before a weekend ceasefire took hold in the Persian Gulf, according to MarketWatch.
Signum had used its calculations to forecast that a reversal in the U.S. bombing campaign against Iran could come between July 22 and July 30, MarketWatch reported. Over the weekend, fighting gave way to an uneasy pause across the region.
The move showed up fast in markets. MarketWatch reported that oil prices dropped 10%, U.S. Treasury yields fell and U.S. stock-market futures climbed ahead of Monday’s Wall Street open.
What is the Trump TACO formula?
The formula is Signum Global Advisors’ attempt to quantify when President Donald Trump may retreat from a hard-line policy stance under pressure. MarketWatch said traders have used the nickname “TACO” for that kind of Trump reversal trade.
According to MarketWatch, Signum’s model weighed several indicators: Brent crude prices, the S&P 500, 10-year Treasury yields and the number of crossings through the Strait of Hormuz. The goal was to estimate the odds of de-escalation by the Trump administration.
The Strait of Hormuz is a key oil-shipping route between the Persian Gulf and the Gulf of Oman. Disruption there can quickly feed into energy prices, inflation worries and broader financial-market stress.
How did markets pressure the White House?
MarketWatch reported that pressure on the White House built last week as Brent crude moved above $100, the S&P 500 weakened and the real yield on the 30-year U.S. Treasury reached 3%.
For a president described by MarketWatch as highly sensitive to market moves, those signals carried political risk ahead of the November midterm elections. The weekend ceasefire suggested that the administration had stepped back as market stress increased, according to the report.
In a Sunday client note cited by MarketWatch, Signum said its index moved past earlier levels that had lined up with prior Trump policy turns on March 22, May 18 and June 11. The firm also pointed to Axios reporting that Trump’s thinking began to shift on Thursday evening.
What does Signum expect next?
Andrew Bishop, Signum’s global head of policy research, still expects what he described as a face-saving compromise between the U.S. and Iran, according to MarketWatch.
Bishop’s base case, as reported by MarketWatch, is that a tacit deal could let the U.S. say Iran will not fire on ships and will not impose tolls. At the same time, he expects Iran may gain what he called a meaningful precedent for visibility and management of shipping through Hormuz.
MarketWatch noted that the TACO trade became a familiar market theme in 2025 after several episodes of Trump brinkmanship, including the announcement and later delay of his “liberation day” tariffs.
For investors, the weekend truce gave the model a fresh spotlight: Signum called for a possible turn in the final stretch of July, and the ceasefire arrived inside that window.
This story draws on original reporting from MarketWatch.