The TACO trade is resilient, despite the renewed double digit tariff rates that President Trump announced yesterday on several countries, including a 25% tariff on Japan and South Korea.

Why it matters: The options market is providing further proof that Wall Street is not panicked about tariff policy.

By the numbers: Options pricing indicates an expected 0.6% move in either direction on the deadline day of July 9, according to data compiled by Stuart Kaiser, head of U.S. equity trading strategy at Citi.

• That implied move is actually below the daily average for July, according to data from BNP Paribas and Bloomberg.
• The data also indicate higher implied moves off the upcoming CPI print on July 15 and the Federal Open Market Committee meeting on July 30.
• This could indicate investors are "pricing more risk that trade policy upends the economy and FOMC path" than for the tariff deadlines themselves to cause downward pressure, according to the note from Kaiser.

Yes, but: As the tariff headlines trickled out yesterday, stocks sold off to session lows before recovering slightly to still close in the red.

• Consumer discretionary was the biggest sector loser in the S&P 500 to kick off the week, a sector filled with retail names that could be most vulnerable to tariff shocks (but also, Tesla, which had its own headwinds yesterday.)
• Any tariff impact this time around could be more country and sector specific than what we saw in April, according to the note from Kaiser.
• And to that end, Asia Pacific equities ETFs sold off following the announcement of double-digit tariffs on several nations in Asia.

What they're saying: "As long as the market can plausibly assert that there is room for negotiation or extension, then it won't freak out (cue theme song 'won't get fooled again')" wrote Steve Sosnick, chief strategist of Interactive Brokers, in a text to Axios.

• Investors will believe tariff policy when they see it in its final form.

The intrigue: That finality may be difficult to suss out.

• Trump wrote in his letter to South Korea that "tariffs may be modified, upward or downward, depending on our relationship with your country."

The bottom line: "Thanks to the relentless dip buying, the 'half-life' of dips has been drastically shrinking," according to Sosnick.

• The Wall Street trauma response in April looks like one of underreaction versus overreaction, since bad news is perceived to "just become buying opportunities anyway," he noted.
• Cue the Tuesday Tacos.

Wall Street is looking for the winners and losers of the trade war as tensions heat up, with Trump threatening levies ranging from 25% to 40% yesterday.

• For clues, look at company performance after the Federal Reserve's recent aggressive rate hiking cycle.

Why it matters: As tariff policy continues to be murky, Wall Street is looking for clarity on which companies can survive regardless of where levies land. The winners and losers of rate hikes could provide that roadmap.

What they're saying: "Interest rates have existed a lot longer than tariffs," said Brian Mulberry, a client portfolio manager at Zacks Investment Management, with over $20 billion in assets under management.

• Mulberry said the tariff shock will be "a lot less impactful" than the increases to the cost of capital have been.

Zoom in: To understand the factors that could make companies resilient to tariffs, look at what helped companies withstand the negative effect of rate hikes:

1. Low debt levels and healthy balance sheets.
2. The ability to maintain forward guidance.
3. Continued strength relative to peers.

Who wins? The companies that typically fit the bill described above are also the giants within each sector in the market.

• Mulberry name checked the likes of Walmart, Microsoft, J.P. Morgan, Caterpillar and Procter & Gamble, just to name a few companies.
• For examples of the potential losers, he pointed to Target and Kohls, which he said were "overly leveraged to begin with and will continue to struggle."

Between the lines: Adaptability is the name of the game for companies that have survived a lot over the last five years, from a global pandemic to record-breaking inflation.

What to watch: Earnings season is coming, and estimates for this cycle fell by more than the historic average given policy uncertainty, according to FactSet.

• That could make it easier for companies to beat earnings expectations.
• "Superior earnings visibility and the high-quality nature of U.S. large-cap companies — particularly in the technology sector — continue to support investor confidence," according to a midyear outlook note from Global X.

The bottom line: If megacap companies are best equipped to weather trade tensions, that could support the broader market, since these giant companies have a larger impact in the market cap-weighted S&P 500.

Take a risk? The vast majority of chief financial officers said now is not the time, according to a survey released by Deloitte this morning.

Why it matters: Tariff uncertainty is leaving companies in a holding pattern, even as the markets mostly ignore the back-and-forth on economic policy out of the White House.

• Risk-taking for CFOs is a typically good thing. It means taking chances on new lines of business, making acquisitions, or entering into other kinds of investment, which are all actions that lead to economic growth.

How it works: For the CFO Signals survey, Deloitte polled 200 CFOs at North American companies, with at least $1 billion in revenue, from June 4 to June 18.

By the numbers: Only 23% of CFOs surveyed rated the North American economy as "good now" compared to 50% polled in the first quarter.

• Just 33% of these executives said it's a good time to take on more risk, down from 60% in the first quarter, when optimism about the new administration was soaring.
• CFOs said top external risks included the economy (53%), cybersecurity (51%) and interest rates (43%).

Reality check: Risk appetite is still higher than it was last year, toward the end of President Biden's term and ahead of the November election, when only 12% of CFOs said it was a good time for risk-taking.

Zoom in: There's a high level of uncertainty in the CFO universe now, said Steve Gallucci, global and U.S. CFO program leader at Deloitte.

• He mentions trade policy, geopolitical turmoil in the Middle East and the continuing tensions between the U.S. and China.

The intrigue: Yesterday's flurry of tariff letters from the White House seemed to ratchet up the trade war, precisely at the moment when observers thought things were reaching a more firm end point.

The bottom line: When the survey took place, companies were still awaiting the end of the pause on tariffs and hoping for certainty.

• That is now somehow even further away.