Markets had dismissed tariff risks under the assumption that Trump would follow an earlier pattern and back off, in what became known as the so-called TACO trade. That allowed stocks to reach new record-high territory recently, marking a stunning rebound from the collapse triggered by his “Liberation Day” reciprocal tariffs in April.

The Washington Post reported that U.S. stocks fell Friday after Trump threatened Canada with 35 percent tariffs, although a Post business report suggested that Wall Street has largely tuned out Trump’s threats on the assumption that he will back away from his most devastating policy positions.