Roiled markets mean big bucks for banks

One group profiting from all the Liberation Day market chaos? Trading desks across Wall Street.

Citigroup’s equity traders, for example, just reported their best quarter in five years, generating $1.61 billion over the last three months. Then there’s Goldman Sachs, which posted the best quarter of trading in Wall Street history: Its equity trading division brought in $4.3 billion for Q2, roughly $600 million above what analysts expected.

Over at JPMorgan Chase, traders enjoyed their best Q2 ever, raking in $3.25 billion. They helped give the company the most impressive flex of all this earnings season: JPMorgan’s market cap is now larger than its next three biggest competitors—Bank of America, Citigroup, and Wells Fargo—combined.

Trading keeps winning

Wall Street trading divisions, which make money from fees by facilitating the buying and selling of stocks, have been wiping the floor with other parts of big banks’ businesses for a while now.

The slowdown in both IPOs and M&A activity has put a serious damper on the investment banking business, leaving traders to generate roughly 75% of big banks’ total revenue for the last three years, according to the FT. Geopolitical chaos, high interest rates, and volatile trade policies have all pushed companies to wait longer to go public—at the exact same time that those forces have boosted activity on trading desks.

These days, banks are more optimistic about dealmaking coming back, too, with Morgan Stanley CEO Ted Pick saying on a call with analysts that the investment banking industry is still in the “early stages” of recovery. But maybe he should put an emphasis on the “early”: Morgan Stanley investment banking revenue fell 5% year over year.

What’s next for the Street?

It wasn’t all raining money and popping champagne Wolf of Wall Street style, though. Shares of Wells Fargo, for example, dropped yesterday after the bank cut its 2025 guidance for net interest income—which is calculated by measuring the difference between cash earned on loans and what it pays out in deposits—noting that the figure will remain flat.

But overall, many analysts see more moneymaking in Wall Street’s future, especially as the dealmaking pipeline gains momentum and the White House pushes for deregulation.—LB