Wall Street’s biggest banks are cashing in on a surge of trading activity spurred by uncertainty surrounding President Trump’s escalating tariff policies. In the first quarter of 2025, Goldman Sachs, JPMorgan Chase and Morgan Stanley reported soaring revenues from their equities businesses — surpassing the frenzied levels seen during the pandemic’s most volatile days, the Wall Street Journal reported.
The three banks collectively earned more than $12 billion in equity trading fees as investors scrambled to reposition their portfolios in response to Trump’s tariff threats and subsequent policy flip-flops. Goldman Sachs CEO David Solomon told analysts on Monday that while uncertainty remains high, clients are staying active and “shifting positions” at a rapid pace. “We still see significant activity levels,” he said.
Tariff turbulence fuels historic trading revenue
The revenue spike comes even before Trump’s “Liberation Day” tariff announcement on April 2, which roiled markets and prompted a one-day rally after the administration paused some tariffs. The stock market has since been on a rollercoaster, with investors unsure how to navigate Trump’s next moves. Trading in currency and Treasury markets has also surged, with Goldman reporting “record activity levels” in fixed-income and currency products.
All three banks beat Wall Street’s expectations in the first quarter. Goldman posted a 27% rise in equities revenue, JPMorgan reported a 48% increase, and Morgan Stanley said its equities trading rose 45%. Derivatives, particularly, saw heightened interest as clients hedged against volatility.
Investors shift strategy amid recession fears
While trading desks are profiting, executives warned that the broader economy remains vulnerable. Trump’s tariff escalations have already dragged down US stock indexes, which suffered their worst quarter since 2022. There are signs that investor sentiment is cooling on US assets, with many redirecting funds to international markets, including Europe and South America.
Morgan Stanley CEO Ted Pick described the market mood as being driven by “animal spirits,” with clients eager not to get caught “offside.” Yet too much volatility for too long could eventually drive investors to the sidelines, a concern echoed by JPMorgan and Bank of New York Mellon leaders.
Collateral calls rise, but no signs of panic
Banks also revealed that volatility had triggered requests for more collateral from hedge funds, sometimes in the hundreds of millions. But so far, clients have met those demands without withdrawing from the markets. “A lot of the activity has been de-levering,” said BNY Mellon CEO Robin Vince, rather than full exits.
Still, bankers say the uncertainty has chilled decision-making across sectors, weighing on investment banking. Goldman reported that its deal backlog is growing again but said the
market needs stability before IPOs and major deals can resume. Over the weekend, Goldman executives reportedly held calls with CEOs to assess the market climate and determine how much calm would be needed to move forward.
Outlook uncertain as more earnings roll in
Wall Street will get more insight into how banks are managing this volatile environment when Bank of America and Citigroup report their first-quarter earnings. For now, trading remains the lone bright spot for big banks amid an otherwise cautious financial landscape.
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