Wall Street banks rake in $37 billion in best performance for a decade after cashing in on Trump's stock market chaos
Wall Street raked in $37billion in trading revenue in the first four months of Donald Trump's presidency after cashing in on his stock market chaos, it has emerged.
JPMorgan Chase, Goldman Sachs, Morgan Stanley, Bank of America and Citi Group this year recorded their best combined first-quarter performance in more than a decade, The Financial Times reports.
Trump's second term has seen investors rejig their portfolios during a period of heightened uncertainty fuelled by sweeping tariffs and the emergence of Chinese startup DeepSeek's low-cost AI model.
Stock trading was a notable performer for banks during this time, with revenue having jumped 23 per cent in the first three months of the year.
All five of Wall Street's biggest banks recorded revenue from equities trading, while total revenue from fixed income trading rose roughly 6 per cent to $21billion.
Experts say this is the highest peak since the second quarter of 2020 when traders also benefited from the bouts of volatility fuelled by the Covid-19 pandemic.
Despite the banks having topped first-quarter profit estimates, analysts warn that these results offer a glimpse into the implications of Trump's trade agenda. Although his return to the White House boosted business optimism in the first quarter, they note that policy uncertainty has upended those hopes.
CEOs across Wall Street have warned about the potential fallout of the US tariffs, which saw bank stocks pummel when they were announced this month - a stark turnaround from the optimism for Trump's pro-business agenda at the start of 2025.
Analysts warn the tariffs could reignite inflation and constrain economic growth, curbing companies' appetites for dealmaking and borrowing. Weakening consumer sentiment could also weigh on spending and loan demand.
Wall Street raked in $37billion in trading revenue in the first four months of Donald Trump's presidency after cashing in on his stock market chaos, it has emerged. Trump is pictured in the East Room at the White House yesterday
JPMorgan Chase, Goldman Sachs, Morgan Stanley, Bank of America and Citi group this year recorded their best combined first-quarter performance in more than a decade. Pictured are traders working the floor at the New York Stock Exchange on Monday
JPMorgan topped first-quarter profit estimates on record equities trading and higher fees from debt underwriting and advising on mergers.
Trading revenue climbed 21 per cent to $9.7billion and earnings were $14.6billion, or $5.07 a share, for the three months ended March 31. JPMorgan's shares also rose over 3per cent after hitting a seven-month low last week.
CEO Jamie Dimon, who last week warned of negative consequences from trade wars, maintained his cautious tone as corporate America navigates Trump's tariffs.
'Clients have become more cautious amid an increase in market volatility driven by geopolitical and trade-related tensions,' Dimon said Friday. 'The economy is facing considerable turbulence, including geopolitics.'
Dimon said the bank's economists estimate a 50 per cent chance of a US and global recession this year, down from 60 per cent earlier this month.
'People are being cautious and pulling back on deals. The middle-market companies are being very cautious on investments,' Dimon added.
The bank increased its provisions for credit losses in the first quarter to $3.3billion from $1.9billion a year earlier. Consumers and businesses could struggle to repay their loans if the import levies reignite inflation and dampen economic growth.
JPMorgan topped first-quarter profit estimates on record equities trading and higher fees from debt underwriting and advising on mergers. CEO Jamie Dimon, (pictured in NYC on April 9 this year) who last week warned of negative consequences from trade wars, maintained his cautious tone as corporate America navigates Trump's tariffs
Bank of America topped estimates on Tuesday for first-quarter profit as interest income grew and volatile markets helped its stock traders rake in a record haul, lifting its shares more than 4 per cent.
As markets whipsawed around Trump's tariff policies, the second-largest US lender brought in 9 per cent higher trading revenue, mirroring trends seen at rivals.
'There is a lot to potentially change given the uncertainty around the tariffs and the policies on the future path of the economy,' CEO Brian Moynihan told analysts.
Equities trading jumped 17 per cent to a record $2.2billion, while fixed income, currencies and commodities trading revenue jumped 5 per cent to $3.5billion, propelling its markets revenue to the highest in more than a decade.
'These results were sustained by an economy growing at a moderate pace and the client concerns over trade policy and recent market turmoil,' Chief Financial Officer Alastair Borthwick said.
'Still, our research team at this point does not believe we will see a recession and our clients continue to show encouraging signs. Employment is obviously healthy and consumers have proven resilient.'
The bank recorded investment banking fees of $1.5billion, down from $1.7billion over the last quarter and down 3 per cent on a year-on-year basis amid market uncertainty. But Borthwick said the deal pipeline was probably stronger than it was last quarter.
BofA's earnings were $7.4billion, or 90 cents per share, in the first quarter of 2025. That compares with $6.7billion, or 76 cents per share, a year earlier.
Bank of America topped estimates on Tuesday for first-quarter profit as interest income grew and volatile markets helped its stock traders rake in a record haul, lifting its shares more than 4 per cent (file photo)
Citi Group CEO Jane Fraser (pictured in 2023) has predicted that 'the US will still be the world's leading economy'. Citi Bank maintained its revenue and expense guidance for this year despite uncertainty about growth
Citigroup beat Wall Street estimates for first-quarter profit on Tuesday and moved closer to its profitability target as its traders reaped a windfall from volatile markets that fueled client activity.
The third-largest US lender's earnings echoed those of Wall Street rivals, whose results were also lifted by stronger equities trading.
Citigroup's return on tangible common equity, a closely watched profitability gauge, reached 9 per cent in the first quarter, moving closer to its goal of 10 per cent to 11 per cent next year.
The bank maintained its revenue and expense guidance for this year despite the uncertainty about growth.
'We continue to help our clients navigate an uncertain environment,' CEO Jane Fraser said in a statement. 'When all is said and done, and long-standing trade imbalances and other structural shifts are behind us, the US will still be the world's leading economy, and the dollar will remain the reserve currency.'
Citi's net income climbed 21 per cent to $4.1billion, or $1.96 per share, in the three months ended March 31. Investment banking revenue increased 12 per cent in the first quarter, mainly from advising on mergers and acquisitions.
But uncertainty is reducing activity in the second quarter, Fraser told analysts in a conference call. She said: 'Most clients are pausing their plans and no one is taking a bet in the market right now.'
Although Goldman Sachs beat first-quarter profit estimates, CEO David Solomon (pictured last year) said the 'great uncertainty' that hung over markets in the first quarter and has warned of a difficult environment ahead
Morgan Stanley earned $4.3billion, or $2.60 per share, in the three months ended March 31. That compares with a profit of $3.4billion, or $2.02 per share, a year ago. Morgan Stanley's investment banking revenue rose 8 per cent from a year earlier, bolstered by higher advisory and fixed income underwriting revenue (File photo of Morgan Stanley HQ in NYC)
Goldman's profit rose 15 per cent to $4.74billion, or $14.12 per share, for the three months ended March 31, the bank said on Monday.
Turbulent markets lifted Goldman's equities trading revenue by 27 per cent to a record $4.2billion as investors scrambled to remake their portfolios to mitigate the hit from the new tariffs.
Fixed income, currency and commodities trading revenue rose 2 per cent to $4.4billion.
Although Goldman beat first-quarter profit estimates, the bank's CEO also warned of a difficult environment ahead.
'While we are entering the second quarter with a markedly different operating environment than earlier this year, we remain confident in our ability to continue to support our clients,' said CEO David Solomon, who noted the 'great uncertainty' that hung over markets in the first quarter.
Morgan Stanley also beat first-quarter profit estimates on Friday, helped by record equity trading and strong wealth management results, while its CEO expressed more optimism about dealmaking than his counterparts.
The bank earned $4.3billion, or $2.60 per share, in the three months ended March 31. That compares with a profit of $3.4billion, or $2.02 per share, a year ago.
Morgan Stanley's investment banking revenue rose 8 per cent from a year earlier, bolstered by higher advisory and fixed income underwriting revenue.
CEOs across Wall Street have warned about the potential fallout of the US tariffs, which saw bank stocks pummel when they were announced this month - a stark turnaround from the optimism for Trump's pro-business agenda at the start of 2025 (file photo)
The investment bank reported record equity trading revenue, with a 45 per cent jump from a year earlier, reflecting increases across businesses and regions, particularly in Asia, with its biggest gains in prime brokerage and derivatives.
'While we are entering the second quarter with a markedly different operating environment than earlier this year, we remain confident in our ability to continue to support our clients,' said CEO David Solomon, who noted the 'great uncertainty' that hung over markets in the first quarter.
As uncertainty over sweeping US tariffs roiled markets, some transactions in Morgan Stanley's deal pipeline were paused, CEO Ted Pick told analysts. Still, companies have not given up on them, he said.
'We are still, I will call it "cautiously optimistic" that we won't go into recession,' Pick said. CFO Sharon Yeshaya added that the bank's pipeline of potential transactions remains strong and has not been reduced.
Corporations may look at potential tax cuts and deregulation and decide to proceed with deals even as volatility rises, Pick said.
