When it comes to the war in Iran don’t go betting on the TACO trade, says top J.P. Morgan investment strategist

While there have been happier times on Wall Street, President Trump’s military intervention in Iran hasn’t yet pushed the bottom to fall out of markets. Over the weekend, Iran elected a new leader that the White House disapproves of (Mojtaba Khamenei, the son of the late supreme leader, Ali Khamenei), and oil prices began climbing north of $100 a barrel. Many expect Khamenei to continue in the policy footsteps of his father, and the rhetoric from the Oval Office has ramped up in response.But despite these tensions, investors and analysts are still clinging to the timeline President Trump outlined when the action began: four or five weeks, though potentially longer if necessary.

The baseline that Trump will either retreat or reach a deal within a month, a sceptic might argue, echoes a trade now familiar to Wall Street under Trump 2.0: “TACO.” Rather, Trump Always Chickens Out. It’s a bet that has paid off a handful of times since the president returned to the Oval Office, particularly regarding Trump’s aggressive foreign policy on tariffs, which are often quickly reversed.

Indeed, some investment outfits have speculated that the Iran conflict presents an attractive buy-the-dip opportunity, with investors landing bargains at the height of geopolitical panic and (hopefully) seeing asset prices reinflate when the conflict ends in a month or so.

In theory, it’s not bad advice, says Jacob Manoukian, U.S. head of investment strategy for J.P. Morgan Private Bank and Wealth Management. However, he argues that the downside risks of betting on the TACO trade when it comes to Iran are more complex than previous examples.

“As a strategist, the risk case that we’re worried about is that there’s a lot of potential paths that this can take, that are out of the control of one party or another,” Manoukian told Fortune in an exclusive interview. “The risk scenario that Wall Street is trying to figure out is that…global events have started, and we don’t know where they’re going, and we don’t know how they can be controlled, and we’re not sure where [the] fractal pathways will end up.”

Manoukian was speaking prior to the weekend’s update of the new Iranian leader, which demonstrated the J.P. Morgan analysts’ point that bets previously made by Wall Street may not prove to be as straightforward as hoped.

Indeed, it remains JPM’s base case that the Iran conflict will be over within a matter of weeks. But—no surprise to those familiar with the ethos of risk awareness at America’s largest bank—that doesn’t mean traders are taking it as a given, much less will be advising clients to take action based on the uncertain outlook.

As Manoukian describes it, JPM’s estimation is that a deal will be reached with Iran in two to three weeks, motivated in part by the fact that the president won’t want to see oil prices rising much higher in a midterm election year. Additionally, Iran and the Gulf states have finite munitions. “There’s a timeline here where this probably can’t continue forever, and the duration is likely to be limited,” Manoukian added. “But we just don’t know that and it’s hard to be certain.”

Although perhaps a less exciting prospect than buying the dip, Manoukian is focused on ensuring clients have balanced portfolios—especially identifying asset classes that may be underutilized.

J.P. Morgan Private Bank’s 2026 Global Family Office Report found that 80% of respondents had no exposure to infrastructure assets. Such assets may prove particularly useful in an environment where politicians and businesses will be thinking about resilience, security of supply chains, and autonomy when it comes to natural resources and energy.

“That is like the prime example of an asset that structurally and strategically can be really additive to a portfolio when these are the types of events that are going to drive risk-off moments in markets,” Manoukian added. Aversion from investors may arise due to the esoteric nature of the assets, Manoukian added, and as it’s harder to understand it’s therefore harder to access.

“I think with the acceptance of the evergreen structure within the alternative space, what we’ve seen is a lot of clients are much more willing to invest in the asset class because they do have a modicum of liquidity, and they’re starting to understand the importance a little bit more,” Manoukian added.

Eleanor Pringle is an award-winning senior reporter at Fortune covering news, the economy, and personal finance. Eleanor previously worked as a business correspondent and news editor in regional news in the U.K. She completed her journalism training with the Press Association after earning a degree from the University of East Anglia.

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