Stocks dropped on Monday with Donald Trump’s tariff tough talk back in the spotlight. Now, investors are hoping it’s TACO Tuesday.

The so-called TACO trade — a term coined by Financial Times columnist Robert Armstrong that’s short for Trump Always Chickens Out — is back in the market zeitgeist with Trump announcing 25% tariffs on Japan and South Korea set to go into effect on August 1, as well teasing steep tariffs on a handful of other countries.

The S&P 500 dropped almost 1% and the Dow lost more than 400 points on the news as investors fretted over the trade war again after weeks of positive developments, including progress with key trading partners like China.

The TACO acronym caught on with investors because of how frequently Trump has backed down or pivoted from policies that roiled markets (see the April 2 to April 9 “Liberation Day” pivot or his backing down from threats to fire Fed Chair Jerome Powell).

When Trump has backed down, investors have piled into stocks. The market’s increasingly sanguine attitude about Trump’s trade war pushed the S&P 500 back to all-time highs after a near-20% drop from February to April.

Now, investors are waiting to see if Trump walks back his latest threats.

According to Tom Essaye, founder of Sevens Report Research, who has clients including advisors at UBS, Morgan Stanley, JPMorgan, and more, Trump will likely ease his latest aggressive tariff talk again. And if he doesn’t initially, investors feel confident that he will eventually, Essaye said.

The decline on Monday was pronounced relative to the staid moves in stocks in recent weeks, but they were nothing compared to the plunge that rocked the market in April. For the most part, investors have stopped reacting so intensely to trade updates, preferring to focus on things more immediately relevant to stock prices, like earnings.

“Regardless of what sort of shocking headline or confusing headline comes out of the administration, the administration will not purposefully do something that really hurts the economy,” Essaye told BI.

“They can come out tomorrow and say that all of the reciprocal tariff rates are in force for the forseeable future, and I don’t think the market would go down all that much because the market would not believe for one minute that it was going to last very long, and defnitely not long enough to hurt the economy,” Essaye continued.

In the medium-term, however, Trump risks hurting economic growth and profits due to the uncertainty he’s creating for business owners, Essaye said.

Investors making capital allocation decisions around Trump’s trade rhetoric is different than a business owner making planning decisions, he said.

“There’s this idea that the administration will not purposefully do anything they think will hurt the economy, but that doesn’t mean that their policies won’t ultimately hurt the economy,” he said. “There’s a whole pile of history that says that the things they are doing do not turn out well for the economy, and they are sort of flying in the face of that, and we’re going to have to see what happens.”