"Hormuz Remains Closed, High Oil Prices Persist... 'NACHO' Fear Grips Wall Street"

New Buzzword "NACHO" Replaces "TACO" on Wall Street
SCMP: Reflects Shift in Investor Sentiment

Amid ongoing concerns over the unstable ceasefire between the United States and Iran, and fears that the blockade of the Strait of Hormuz could be prolonged, a new buzzword, "NACHO," is spreading on Wall Street. "NACHO" stands for "Not a chance Hormuz opens," reflecting skepticism about the reopening of the Strait.

On May 12 (local time), the South China Morning Post (SCMP) reported, "Ahead of the summit between the U.S. and Chinese presidents, investors are embracing a new market scenario: 'NACHO.'"

U.S. President Donald Trump. Photo by AFP News Agency

"Hormuz Will Not Open" Reflects Market Anxiety

NACHO is a term capturing the prevailing market sentiment of betting on a prolonged stalemate and sustained high oil prices as the blockade of the Strait of Hormuz continues and the fragile U.S.-Iran ceasefire barely holds. The expression began to spread last month after Bloomberg columnist Javier Blas introduced it on social media, attributing it to a trader.

Previously, last year on Wall Street, the term "TACO"—short for "Trump always chickens out"—became popular. At the time, the market anticipated that even if U.S. President Donald Trump used tariffs as a bargaining chip, he would ultimately retreat, and this view was reflected in market sentiment.

SCMP noted, "Now, 'NACHO' has replaced 'TACO' on Wall Street," explaining that just as "TACO" emerged amid market fatigue over President Trump's tariff strategies, "NACHO" reflects a shift in market psychology as Middle East tensions become a central concern for investors.

Although the U.S. military operation against Iran, "Epic Fury," has ended, the security situation in the Middle East remains unstable. U.S. Secretary of State Marco Rubio announced the end of the operation last week, but according to SCMP, the Strait of Hormuz remains effectively blockaded and tensions have not eased.

The Asia Business Daily DB

Chinese Securities Firm: "High Oil Price Trend Likely to Continue"

Against this backdrop, the market is focusing on the possibility that international oil prices will remain elevated for an extended period. In a strategic report, Suzhou Securities—a Chinese brokerage—analyzed, "The market expects oil prices to stay at current high levels for a long time." The firm further explained that the premium for crude oil shipments through the Strait of Hormuz has surged more than eightfold compared to before the conflict, indicating that the market has already priced in a prolonged Middle East crisis.

In particular, the benchmark Brent crude price jumped 3% on May 11 and surpassed $105 per barrel on May 12. According to SCMP, this was influenced by President Trump's social media statement that the negotiation proposal from Iran via Pakistan was "completely unacceptable," which dampened hopes for a near-term resolution.

However, some in the market point out that if the upcoming summit between Chinese President Xi Jinping and President Trump proceeds smoothly this week, there could be a partial easing of tensions. The Chinese government announced that President Trump will pay a state visit to China from May 13 to 15 at President Xi's invitation.

Suzhou Securities stated, "If the summit goes smoothly, there is hope in the market that China could present its position on the U.S.-Iran conflict, potentially helping to ease tensions."

Nevertheless, as concerns persist over the impact of oil prices on inflation and the global economy, Suzhou Securities predicted that the "NACHO" trend is likely to continue.

This content was produced with the assistance of AI translation services.