Global Banks Forecast 10% Trading Revenue Gain Amid Tariff Volatility

Global banks are poised to see a substantial increase in their trading revenue, with forecasts pointing to a 10% rise in the second quarter of this year. This anticipated surge is largely driven by the heightened market volatility triggered by recent changes in U.S. tariff policies. The shifting tariff landscape has created an environment of uncertainty, which traders have leveraged to boost revenue.

The expected 10% gain in trading revenue is a direct result of traders' strategic responses to the complexities introduced by the new tariff policies. This development highlights the resilience and adaptability of global banks in navigating economic fluctuations. The increase in revenue not only demonstrates the banks' ability to capitalize on market volatility but also underscores their pivotal role in the global financial ecosystem.

According to the analyst's forecast, the anticipated boost in trading revenue is particularly significant given the broader economic context. Banks, often seen as indicators of overall economic health, are showing early signs of recovery from the tariff-induced pause in activity. This resurgence suggests that the financial sector is poised to contribute positively to the broader economic recovery, despite ongoing uncertainties.

The projected 10% increase in trading revenue is a notable development for global banks, as it indicates their capacity to thrive in challenging market conditions. This growth is expected to have a ripple effect on the broader financial landscape, potentially influencing investor sentiment and market dynamics. As global banks continue to adapt to the evolving economic environment, their performance in the second quarter will be closely monitored by analysts and investors alike.

Top executives at major U.S. banks, including Bank of America and Citigroup, have indicated that market revenue is expected to grow by mid-to-high single digits this quarter, building on a strong start to the year. Analysts and senior bankers suggest that these banks could even surpass these forecasts when they report their Q2 results. The uptick in trading revenue comes after President Donald Trump’s announcements on new trade duties in early April triggered wide swings in equity prices and drove turnover in U.S. Treasuries to record highs.

“Anybody that’s in the market-making business, providing people with instantaneous liquidity, is going to benefit,” said a veteran Wall Street executive. He added that with stocks tumbling, bond yields rising, and currencies sliding, many investors sought to reduce risk across their portfolios. This environment has created opportunities for banks to capitalize on the increased market activity.

Crisil’s figures cover 12 institutions, including JPMorgan Chase, Goldman Sachs, and Morgan Stanley, as well as their European peers. Mollie Devine, who leads markets analytics at Coalition, noted that sudden price moves often boost trading profits. She called some of the tariff news a “positive catalyst” for desks looking to capitalize on volatility. Even so, Devine pointed out that equity trading outpaced both bond and currency business, despite stock markets being smaller than fixed-income or foreign-exchange venues. She estimates that revenues from equities jumped about 18% in Q2 compared with the same three months last year, while bond trading climbed roughly 5%.

Wells Fargo analyst Mike Mayo said banks are enjoying sustained elevated deal volumes due to ongoing uncertainty around trade policy, interest-rate shifts, and geopolitical tensions. “The higher trading in the last few years is not an aberration, but more a path back to normal after 15 years of zero percent interest rates,” he explained. Looking ahead, Coalition Greenwich predicts that total market revenue for its index banks will rise about 7% in 2025 index, compared with a 13% increase seen in the first half. At $246.2 billion, that would be the strongest annual result since 2009, the year after the financial crisis erupted. Meanwhile, Mayo forecasts that major U.S. lenders will see trading revenue climb around 8% in the first half of 2025, slow to about 5% in the back half of the year, and settle into low single-digit growth in 2026. “The immediate effect of the tariffs was to exaggerate the extent of trading,” but as that news fades, so will the spike in trading, he said.