US Banks Set for 11% Revenue Boost in Q2 Trading

JPMorgan Chase, Citigroup, Goldman Sachs, and Bank of America are expected to collectively generate approximately $26.4 billion in revenue from equities and fixed income trading in their upcoming earnings reports for the second quarter. This projected figure represents an 11% increase compared to the same period last year, driven by the tariff war initiated by President Trump, which has forced investors to make significant adjustments to their portfolios.

Analysts have weighed in on the expected performance. Saul Martinez, a banking analyst at HSBC, expressed optimism about the quarter, suggesting that there may be upside to estimates and guidance figures provided by the banks. He noted that there is still good momentum on the equity side but raised questions about the sustainability of such sales and trading performance.

Betsy Graseck, a banking analyst at Morgan Stanley, also commented on the expected investment banking revenue for the second quarter, stating that it is likely to be better than initially projected. She mentioned that management teams are pointing to building pipelines, indicating a positive outlook for the sector. An unnamed senior Wall Street executive added that market-makers providing instantaneous liquidity are likely to benefit from the current market conditions, as stocks, bonds, and currencies have all experienced declines, leading to derisking activities.

In the first quarter, financial institutions in the US reported a return of 1.16% and net income of $70.6 billion, according to the Federal Deposit Insurance Corporation. This rise in income marked a $3.8 billion, or 5.8%, increase from the previous quarter. The FDIC's report highlights the robust financial performance of US banks, which is likely to continue into the second quarter, driven by the tariff-induced portfolio shifts and increased trading activity.