TACO, of course, is an acronym for Trump Always Chickens Out. It was the ticket to a recovery this past week after the president triggered a selloff over his gambit to acquire Greenland for the U.S. When the dust settled, the Dow Jones Industrial Average ended down 0.5% for the week, while the S&P 500 index lost 0.4%, and the Nasdaq Composite slipped 0.1%.

The small weekly move belied a turbulent stretch. Donald Trump’s inflammatory rhetoric about Greenland unnerved global stock and bond markets as European leaders signaled they were willing to launch a retaliatory “bazooka” to maintain sovereignty over the world’s largest island. Markets rebounded as the president calmed nerves on Wednesday, backing off his threats and citing a “framework of a future deal” over Greenland.

The fracas is far from over, as Greenland and other geopolitical risks remain elevated.

“The stock market is likely to remain headline-sensitive for some time,” notes Alexander Guiliano, chief investment officer of Resonate Wealth Partners. “This week’s market action is an important reminder for investors to not allow political headlines out of Washington to affect their portfolio.”

Many investors were happy to buy the dip. Importantly, some solid economic data backed the rebound. Third-quarter gross domestic product expanded at a 4.4% annualized pace, up from 3.8% in the second quarter; jobless claims were subdued; and inflation data were in line with expectations.

Also encouraging: Transportation stocks hit a record, historically a bullish signal for the economy and market strength. Investors also got a better read on the American consumer, the engine of the U.S. economy. The University of Michigan’s consumer sentiment index rose in January, despite geopolitical upheaval.

“The wealth effect is alive and well with consumers,” says Jamie Cox, managing partner at Harris Financial Group. “It’s hard to be negative with GDP over 4%.”

While investors who bet on TACO aced the test, another kind of stress test is coming soon with fourth-quarter tech earnings.

Apple, Microsoft, and Facebook parent Meta Platforms are scheduled to report results over the next few trading sessions. Tech has been wobbling lately, with several Magnificent Seven stocks lagging behind the broader market. While some tech names are doing great—Advanced Micro Devices comes to mind—the chip sector is on edge, with Intel tumbling double digits on weak guidance.

Greenland, meanwhile, is one of several geopolitical flashpoints that remain unresolved. U.S. tensions with Iran remain high as Trump said he is sending an “armada” of U.S. warships to the Middle East.

One clear beneficiary of the turmoil: precious metals. Silver has been unstoppable, hitting $100 for the first time in history with a 43% year-to-date gain. Gold, up 15% so far in January, hit another record and is hovering just below $5,000 an ounce.

The gains for precious metals, combined with elevated volatility and weakness in the dollar, suggest markets could be in for a wintry mix. “All this suggests market participants don’t believe this week’s other storm—the geopolitical one—has completely faded,” says Joe Mazzola, head trading and derivatives strategist at Charles Schwab.

Better bundle up.

Write to Teresa Rivas at [email protected]