Tariff driven volatility means booming profits for the Big Bank's trading desks

“So long as the volatility continues — and there’s no reason to believe it’s going to stop anytime soon — equities trading desks should remain plenty busy"

Wall Street’s biggest banks are cashing in on market turbulence sparked by President Donald Trump’s trade policies, posting record-breaking stock trading revenue in the first quarter of 2025.

The six largest U.S. banks—Goldman Sachs, Morgan Stanley, JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo—generated $16.3 billion in equities trading revenue, a 33% surge from the previous year, surpassing peaks from the 2008 financial crisis and 2020 pandemic, according to earnings reports. Goldman Sachs, Morgan Stanley, and JPMorgan Chase each reported about $4 billion, driven by institutional investors repositioning portfolios amid Trump’s tariff-driven global trade shakeup.

“So long as the volatility continues — and there’s no reason to believe it’s going to stop anytime soon — equities trading desks should remain plenty busy,” said bank analyst James Shanahan, of Edward Jones. The volatility stems from Trump’s aggressive tariffs, including levies on Canada, Mexico, and China, which have roiled global markets and prompted retaliatory measures.

Fixed-income trading also saw gains, with increased activity in currencies, commodities, and bonds. However, investment banking remained subdued as corporate leaders delayed strategic decisions amid uncertainty. Morgan Stanley CEO Ted Pick noted that professional investors have “a lot to play for” as they chase gains in the chaotic market environment.

The trading boom offers a buffer for banks facing potential loan losses as the economy weakens. Shanahan suggested that robust trading results could help offset billions set aside for faltering loans. Despite the windfall, concerns linger about the broader economic impact of Trump’s policies, with fears of recession and higher consumer prices looming.

Goldman Sachs and Morgan Stanley shares have dropped 14% this year, reflecting market unease. Still, the trading desks’ success underscores Wall Street’s ability to thrive in chaos, even as Trump’s trade wars reshape global markets.

---